Real property gain tax (RPGT) - Details of the Malaysia tax on disposal of property

What is RPGT?
RPGT stands for Real Property Gains Tax. It is the tax which is imposed on the gains when you dispose the property in Malaysia.

RPGT Payable = Nett Chargeable Gain x RPGT Rate
For example, if you bought a house for RM250K and sell it at RM350K , the profit of RM100K is chargeable under RPGT but you may be entitled to deduct expenses such as legal fees, agency commission and renovation cost (with proof of receipt) and subject to Lembaga Hasil Dalam Negeri(LHDN) approval in order to get the Nett Chargeable Gain.

Latest 2019 RPGT Rates in Malaysia

	Malaysian	Company	Foreigner
1st Year	30%	30%	30%
2nd Year	30%	30%	30%
3rd Year	30%	30%	30%
4th Year	20%	20%	20%
5th Year	15%	15%	15%
Thereafter	5%	10%	10%

5% Hike Since 2019

Is Malaysian entitled for RPGT exemption?
Yes for Malaysian, it is a once in a lifetime so you must not have applied before this or it could also mean for first time seller BUT ONLY for residential property disposal.

How to calculate the year of your property disposal?
It based on the date of the sale purchase agreement. For individual seller, if your sale purchase agreement is dated on 1st of Jan 2016 and disposal/new sale purchase agreement is dated on 31st March 2019. Your disposal year will be in the fourth year which falls under 20% rate.

During the execution of the Sale Purchase Agreement (Subject to RPGT), is there any retention sum to be submitted to LHDN?
Yes, if the disposal is subjected to RPGT. Based on CKHT 3, please find the percentage table below:-

Malaysian/Local Company	Non Malaysian
3%	7%

The above information is intended for educational or reference purposes only as such it should not be used to inform or affect any personal decisions or for any personal use. If you are in any doubt, please contact us for further information.