Real Property Gain Tax (RPGT) 8 October 2011

Tax Budget 2012: Real Property Gains Tax (RPGT)

Real Property Gains Tax (RPGT)

Under Budget 2012, it was proposed that a real property gain tax (RPGT) will be revised to the following:

Disposed within 2 years, RPGT = 10%
Disposed after 2 & up to 5 years , RPGT = 5%
Disposed after 5 years, RPGT = 0%


Revision in Budget 2013:

It was announced in BUDGET 2013 that the RPGT Rates had been revised to as follows:

Properties held and disposed within 2 years, RPGT = 15%
Properties held and disposed after 2 & up to 5 years, RPGT = 10%
Properties held and disposed after 5years, RPGT = 0%

Please visit here for more details: Budget 2013: Higher Real Property Gains Tax (RPGT) Rates


The previous RPGT is 5% for all properties sold within 5 years from the date of purchase.

The Government is delivering a message to Public for preventing an asset (properties) bubble and cooling off the property market. The rates of increase were generally acceptable to most consultants & industry players as the rate increased was considered moderate.


The investors are indeed advised to look into Bank Negara’s policy on liquidity and ease of getting housing loans.

The revised Real Property Gains Tax (RPGT) has hardly affected those who have bought into new properties directly from the developers.

The buyers are only able to sell their properties once the construction is completed, normally 2-3 years are already gone, thus making the effect minimal.

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Author:
Mr. Tony Ng B.C. is Founder and Managing Partner of NBC Professional Group.
Tony Ng BC has written 86 articles for NBC Blog.

121 Comments

  • nbc.geoffrey
    nbc.geoffrey

    The original RPGT rates ranging from 0% to30% under the RPGT Act are still there. However, a separate RPGT tax exemption order is issued to set out the tax rate at 5% for disposal within 5 years (before Budget 2012). It is going to be the same that for RPGT tax of 10% for disposal within 2 years, it will be gazetted through RPGT tax exemption order too. As such, disposal of real property or real property company shares are still subject to the same RPGT tax rates, i.e. 10% or 5%. You may realise that there is not any proposed amendment to the principal RPGT Act under the Budget 2012, but revised RPGT tax rates will be made through RPGT tax exemption order later.

  • Tim Chee Voon

    How about disposal of shares in real property company?

  • nbc.angelina

    This area was not discussed or illustrated in the budget 2012 (or infact has never discussed in previous budgets).

    Thanks for your quest, Tim, we will work out something on this area (real property company) in this post.

    Please do bear with us for latest news.

  • When will this new RPGT rates be effective?

  • nbc.angelina

    Hi Grace, the new RPGT rates will be effective from 1 January 2012.

  • I have a company who wants to dispose a property they have owned more than 10 years. I am getting conflicting answers pertaining to the 5% RPGT.
    One law firm told me that regardless how long they owned the property, they are subjected to the 5% RPGT.
    Another law firm told me that as long as they owned the property for more than 5 years, then they are exempted.
    Please clarify which is the correct answer.

    One thing I do know is that beginning Jan 1, 2012, across the board, that is individual or company, any properties over 5 years is exempted.

  • @Bo. Yes, there was some confusion to the exemption of RPGT. But the final outcome is that – disposal of real property with holding period of > 5 years is exempted from RPGT.

    The exemption is given via exemption order instead of RPGT principal act itself —- i.e. Real Property Gains Tax (Exemption)(No.2) Order 2009 [P.U. (A) 486]
    http://www.nbc.com.my/files/Real_Property_Gains_Tax_(Exemption)_(No._2)_Order_2009.pdf

    Technical Guidelines on RPGT issued by IRB on 5 May 2011 confirms disposal after 5 years is exempted from RPGT.
    http://www.hasil.gov.my/pdf/pdfam/GarisPanduanCKHT.pdf

    In respect of amendments as proposed in Budget 2012 to impose RPGT of 10% for disposal within 2 years effective from 1 Jan 2012, we are not aware of that the exemption is gazetted this far. Meaning to say, legally the law to impose 10% has not been passed althought we are less than 1 month to 1 Jan 2012.

  • Michelle

    Can i know if the revision of RPGT to 10% (for house <2 years) refer to S&P date or stamping date? If S&P is signed by this year and stamp in January, can i fall back the current 5% tax instead of the new 10%? Please advise urgently

  • @Michelle, the date of S&P is the one we refer to.

    The transaction was effectively taken place at the date of S&P, the submission of RPGT form to IRB is merely part of the procedures to complete the deal.

    Merry Christmas to you.

  • nicole

    any RPGT impose on gain on disposal of property from goodwill?

  • @nicole
    RPGT is imposed on gain on disposal of land or real estate. Transfer/disposal of business goodwill is not subject to RPGT. Is this what you meant in your question?

  • The tax law on RPGT of 10% for disposal within 2 years effective from 1 Jan 2012 has been gazetted on 30 Dec 2011 via P.U (A) 434/2011 REAL PROPERTY GAINS TAX (EXEMPTION) ORDER 2011.

    Click here http://www.nbc.com.my/files/P.U.A.434-2011-REAL-PROPERTY-GAINS-TAX-EXEMPTION-ORDER-2011.pdf

    PU 434/2011 will supersede Real Property Gains Tax (Exemption)(No.2) Order 2009 [P.U. (A) 486].

  • hi sir,
    iam buy a house march2008 238k…then sold the house 320000 in year jan 2012…..this is the 2nd house i sold after sold first house in 2005…please help me how much i must py for RPGT..tq

  • hi Hadi, from March 2008 to Jan 2012 (almost 4 years), that will fall under the category of 2-5 years, your RPGT will be 5% based on the gain of RM82k (320k-238k).

    You may try to claim the stamp duty, legal fees for S&P and Loan. These are costs incurred in acquiring & disposing of your property.

    Please make sure your lawyer has included such expenses when computing your RPGT.

    Good luck to you, Hadi. :)

  • Jasper

    Hi Sir,

    If a foreigner sells his property in Malaysia, will there be any RPGT payable? If yes, how many %?

  • The above rates will be applicable if you sell in this year.

  • Jasper

    Thanks for the reply.

    If I appoint a Power of Attorney to act and sell the property on my behalf, to sign the S&P etc on my behalf, would there be any RPGT involved if the house is already 10 years old?

  • The RPGT 5% is for purchase price or sales proceeds?

  • does company dispose the property within 3 years subject to RPGT 5% or 20%.

  • Hi, if I were to sell at a no gain or even loss situation within 2yrs, will I be subjected to rpgt since there is no profit gained?

  • Tax Budget 2012 for Malaysian is clear. However Tax Budget 2012 RPGT for foreigner is still ambiguous. May I know if the RPGT for foreigner is still 5% flat? Thanks

  • Hi, I am going to sell my house which I bought on 24 may 2007. And if I sell the property after the date, will I still have to pay the 5% tax?

  • Hi to add on, if I sell the property on 24 June 2012, which I posses the house for 5 years and 1 month. Will I still need to pay 5% tax? Thanks

  • @yi – Real property gain tax is taxed on the profit/gain made, not on the sale proceeds.

    @alan – The same RPGT tax rates are equally apply to disposal by individuals and companies. For disposal within 3 years, it is subject to 5%.

    @Lee – Yes, you are right. if you disposed of within 2 years, then the RPGT is calculated at “zero gain x 10% = zero RPGT”. For disposal of real property, it is still required to be declared and filed with IRB.

    @Poly – The RPGT exemption order overrides Schedule 5 of RPGT Act,i.e. the same RPGT tax rates apply equally to Malaysian and non-Malaysian.

    @Ena – No, it is considered disposed of in sixth year, 0% rate applies, ie no RPGT.

  • Thanks! You solve my headache :)

  • Hi, I bought an apartmenet on March 2011 and I want to sell now so the RPGT will be 10%.

    examples:
    buy the house at 210k
    sell the house at 280k
    legal fees + stamp duty fees etc = 15k
    so means 70k (earn) – 15k = 55k.
    is it means the 10% from 55k, so I need to pay the tax of 5.5K.

    And if this is my 1st house that I am selling, I was told that everyone got a chance for the tax exemption. So means if I want to exempted from the tax, I just tell the lawyer I would like to exempted from the tax, and they can actually handle for me, right?

    • Yes, this is your first house sale & you will be exempted from tax. Your lawyers will handle this for you, enjoy your gain!

  • Hi,
    My boss disposed an individual land, can I deduct the agent and lawyer fee from gain? The land is 2 to 5 years, so subject to 5% RPGT?

  • Hi Caey, yes, it is subject to 5% RPGT.

  • Albert

    Hello.

    I have a few questions to ask regarding to the RPGT.

    1) The RPGT calculation period refer to the S&P stamping date or etc ?

    2) If before that i have other houses ( sole owner or joint owner ) that have been sell but already over 5 years mean that no RPGT charges for the previous deal. How about for current house that i plan to sell it but still within 5 year period ( according to the calculation as mention as (1). ) Is it, i still entitle for the chance for the tax exemption and consider as the first home that incur for the RPGT ?

    3) RPGT charge calculation as below correct ?

    A) My gain from the sale= RM100k
    B) S&P and loan legal fee = RM2.5k
    C) MRTA cost= RM1k ( Is it can be used to reduce from the gain ? )
    D) Renovated cost= RM40K
    E) What other item costs ( Stamp duty, etc ??? ) still can be claim to reduce the gain amount , please advice.
    Balance of Gain= 56,500
    Exemption up to RM10,000 or 10% of the net gains, whichever is higher. = RM10k
    Net Gain = RM 46,500
    Sell at year 5th,
    RPGT need to pay= RM2,325.

  • Hi Albert, the following are my replies:

    1. Yes, it is refering to the date of S&P of buying & selling the house.

    2. As long as you have never claimed the RPGT exemption, then you deserve for that no matter how many houses you have sold before.

    3. Legal fee & stamp duty are part of the transactions, so it is claimable.

    But MRTA & Renovation cost were the options & not a must item, thus it is not claimable.

  • Elaine

    Hi, may I know if a property owned by parent more than 5 years but parent already pass away and now already transfer to their children according with Legal Will.

    Their children decide to sell the property so is it taxable in RPGT?
    I don’t know RPGT is count the S&P date which acquired by their parent or count the date of transfer by legal Will.

    Thank you.

  • Hi,

    I bought my first property in June 2009 for RM282k, got my key in August 2011. If I am selling it now for RM382k, what is my RPGT?

    Can I deduct the legal fee, etc from it before taxing?

  • Hi CY, you may refer to my reply to Albert on 7 February 2012.

    Legal fee & stamp duty are deductible when calculating the RPGT.

    If you believe this is big gain & high tax, then you can claim your first RPGT exemption.

  • Hi Angelina, do I still need to declare this RM100k gain in my income tax regardless of whether I claim my first RPGT exemption?

  • Yes, CY, you are still required to submit your RPGT form & opt to claim your first RPGT exemption. Your lawyer will do it for you at cost of approximately RM200 per person. (if joint name, all owners have to submit as well).

    If this property jointly held by you & your partner, then both will be equally shared the gain.

    Additional comment on 29 February 2012:
    Sorry for not answering quite to the question.

    CY, you do not need to report this gain in your income tax return as this has already been reported at time of submission of RPGT to LHDN.

  • Beside stamp duty, legal fees for S&P and Loan what are the other expancess can submitted for exemtion , renovation cost ?

  • Hi Samy, technically tough for others (renovation costs) to be included in the calculation as these are very difficult to prove the renovation is part of the process to reinstate the conditions from non-occupying to ready-for-use stage.

  • Certain gains on the disposal or transfer of properties are tax exempted. What are those gains? Check it out now!

    Gains on disposal of properties that are exempted from tax (RPGT Exemptions)

  • Hi Angelina, what you mean this ” If you believe this is big gain & high tax, then you can claim your first RPGT exemption “, do you mean that we can only claim once in our life time ?

    Thank you.

  • Yes, Irene, please refer to the following statement:

    “An individual who is a Malaysian citizen or a permanent resident will be given a once-in-a-lifetime exemption on any chargeable gain arising from the disposal of his/her private residence if he/she elects in writing for the exemption to apply to that private residence. ”

    You are given the option to choose when to claim it.

    The full details can be found in the following link:

    http://www.nbc.com.my/blog/gains-on-disposal-of-properties-that-are-exempted-from-tax-rpgt-exemptions/

  • Hi Angelina

    Desperately need the info on how much taxes I need to calculate and put aside…too many contradicted infomation given by property agents.

    I bought a house on Dec 2009 and I decided to sell it now so the RPGT will be 5% (> 2 years already, right?)

    Buy the house at RM300k..doing reno around RM50K
    Sell the house at RM550K

    What I’ve been told is that..

    1. Penalty imposed by bank : 3% from loan amount
    2. RPGT : 5% from (RM550K – RM300K)
    3. Goverment tax : 6% from RM300K (Is this true? another 6% tax
    by govt on top of RPGT?)
    4. Agent commission : 2% from RM550K
    5. Lawyer + stamp : RM5k

    Can you help me to verify the above? Too many deduction make me feel not worth to sell it..This is my 1st time selling property, can I get the RPGT exemption?

    Thanks v much Angelina for kindness :-)

    • Congratulation! FSM. Below are my reply for your reference purposes:

      1. 3% penalty from bank for earlier settlement.
      Yes, you can’t avoid that.

      2. RPGT : 5% from (RM550K – RM300K)
      Please include stamp duty & lawyer fee when calculating the base.

      3. Goverment tax : 6% from RM300K
      I have no clue at all how does this idea come from. There is no such thing of “6% Government Tax” in any real property transaction.

      4. Agent commission : 2% from RM550K
      Yes. Unless you do it yourself provided you have time & no fear of bargaining price with all kinds of potential buyers. (I did it for my 2 properties and estimated saving of at least RM10K, that’s quite a lot at that point of time).

      5. Lawyer + stamp : RM5k
      Yes.

      FSM, you can’t avoid items 1, 2 & 5 (forget about item 3 and you do it for yourself to get rid of item 4) when you are to dispose of your property.

      By looking at the case, I will suggest you to claim the first RPGT exemption for this transaction as this saving could be an important saving for you & your family.

      Believe me, I did it for once and I have no regret of doing so as that was quite a big sum to me at that point of time.

      To sell or not to sell, it depends on whether you need that money or not.

      Or if you are looking at the bigger unit, then the earning/gain will be very helpful in financing the purchase of your dream house.

  • Hi Angelina

    Glad to have an expert clearing my doubt.. :-)

    Hidden charges that make first timer like me feel uncertain

    Thank you very much…now I can forget item no.2 n no.3 altogether

  • I was confused that if a property is a commercial will be entitled for RPGT een the property is acquired more than 5 years. Or all the property is follow the same rate for RPGT no matter residential or commercial unit?

  • Is it the same percentage of the RPGT imposed for the residential unit and commercial lot?

  • I bought a completed property from a Developer. Do I need to deduct the 2% RPGT from the Purchase Price? The Developer says they are not required to pay, but is unable to show me anything to say they don’t have to.

  • Yes, Fermy, RPGT rates are applicable to both residential and commercial units.

    CY, developers are subject to income tax (not RPGT) since selling properties is their business activities. Thus, they are not subject to RPGT.

    The situation will be more complicated if the developers are unable to sell out all their units before completing the units & obtaining the CF (Certificate of Fitness). But since this is not relevant to this topic, we will discuss it in next article.

  • Hi Angelina..me again :-)

    Just a short one..can I sell the house to foreigner (expat)?

    Any charges will be imposed?

    Thx

    • Hi FSM, it does not matter who do you sell to, the more important thing is whether your buyer has the financial resources to buy your house.

      Anyway, the whole process should be 3+1 months, if they can’t pay you the balance within the period, then it is up to you whether to forfeit their downpayment or not.

      You have to find a good lawyer who is willing listen to all your questions and/or doubts, don’t choose those lawyers who are only interested to ask you to sign documents & tell you they will do the rest.

      Lawyers are the key partner to you when come to the disposal of your lovely property. They are the one who will act on your best interest to protect you (of course, with a fee).

      Talk to the lawyers before making any decision to engage them. If you feel not comfortable dealing or talking with them, just tell them you need to consider and will come back to them, that is.

  • I inherited a piece of land last year, and is planning to sell it.
    I have referred to LHDN document earlier, the examples given are all property purchased. For my case, is’t taxable under RPGT?

    Thanks

    • Hi Sue, you may refer to the following:

      Transactions in which the disposal price is deemed equal to acquisition price (i.e. “No gain no loss” transactions):
      (a) Devolution of a deceased person’s assets to his trustee or legatee.

      (Please refer to this link for full details: http://www.nbc.com.my/blog/gains-on-disposal-of-properties-that-are-exempted-from-tax-rpgt-exemptions/)

      Based on the above, you had inherited that piece of land last year, it means or implies that you have purchased the land at market value last year. As such, any gain arising from the sales will be taxed accordingly.

      How to determine the market value at time you inherited the land will not be discussed here. You may seek your lawyers for their advice on the matter.

      (Note: From what I would expect is your lawyers will tell you that LHDN will have their own assessment department to determine the market value for you.)

  • Hew YL

    Can the “once in a life time RPGT exemption” be used on the disposal of a commercial shop lot or is it strictly for “residential properties”?

    Would appreciate your prompt reply as I am wondering whether to use it on the disposal of my house or shop.

    Thanks.
    YLH

  • Hi,

    If i am a joint owner with my wife for a property and I am claiming the exemption of RPGT for it, does it affect both of our “once a lifetime” exemption claim? Or I can claim the exemption using my wife’s name first? So I can still use my name to claim my second property’s RPGT (assuming this second property is under my name).

    • Yes, CY. Since the property is jointly held by you & your wife, then you can’t claim the exemption separately.

  • Hi, I sold a house in 2008 which was still within 5 years. However, I not sure whether my lawyer used up my waiver of rpgt once in a life time as government has announced no rpgt for property sold in 2008. Can u advise how to check my privilege on waiver of rpgt once in a life time? Thanks

    • Chung, no rpgt in 2008 means you have not claimed. You may clarify with your lawyer on this matter.

  • MR.POH YANG QING

    hi.angelina.
    I would like to clearly understand regarding renovation fee.
    under which circumstand should I reduce the renovation fee under RPGT?

    • Mr Poh, it is a tough call to include renovation into calculation of RPGT.

      1. it is a must?
      2. it is extension or enhancement of value?
      3. local authority approval obtained?
      4. any proof before renovation and after renovation?

      Even though you have all the above, it is still subject to revision and acceptance by LHDN.

      Certain circumstances on the following are definitely not accepted by LHDN:
      1. Renovation due to enhancement of interior finishing
      2. No approval obtained from local authority

      Possible chances:
      1. You buy a land & build a building on it.
      2. You buy an abandoned unit & go on to complete the construction works.

  • Lawrence

    Hi, need your advice on the RPGT calculation.

    RPGT 5% from selling price – buying price
    Eg. 400k – 258k = 142k

    my question is “can we deduct the agent commission 2% & lawyer + stamp fee from the gain amount(142k) before we calculate the 5% RPGT?”

    many thanks.

  • Lawrence

    by the way, I need a lawyer in the process of selling my first house. could you please recommend me a good lawyer in klang valley?

    says if i have a confirmed buyer now through an agent & we’re agreeable on the price, what the next steps i should do?

    Many thanks.

  • cahayalaut

    Can I have a clue regarding rpgt for co-operative society…

  • Any RPGT for foreigners disposing after 5 years? Is same guidelines for both Malaysian and foreigner?

  • As i know, there’s no RPGT for a property over 5 years in the year of 2012.
    But, if my S&P signed on November 2011 but stamped in January 2012. The property had hold for over 5 year in year 2011. Should the law firm deducted the RPGT before they make a full payment to the seller?

    • @Pris, all based on S&P date, regardless of the stamping date. If it was more than 5 years of holding the period, from date to date (not from year to year), then there should have no RPGT.

  • fidaus

    hi my father bought 2.65 mil property under company name wth 2 director name( my father and partner) and within 1 year my father want to change the property under his name and my mother name. any exemption for this case for RPGT

    • @fidaus, why not buy over the shares of your father’s partner? That will make easier the whole episode.

      Option 1, to transfer the property from company to your parents, there will be stamp duty & rpgt issues, no exemption.

      Option 2, if only buy shares from the partner, all you need to pay is just that portion’s stamp duty & rpgt and your father’s do not need to pay anything as he will still be the owner of his shares. Ultimately, your parents will own the company & the company owns the property => your parents own the property.

      Either options will make your parents the owners of the property.

  • MR.POH YANG QING

    hi.angelina.
    I would like to ask regarding the 10% of net gains or $10,000 exemption.
    if my net gain is 150k.
    $15,000 or $10,000 can I enjoy the exemption?

  • Mr Chia Tee

    Hi My wife passed away 2 years ago. She willed me 3 properties. one Condo,one usj linked house & one two storey shophouse. These properties were transfered to my name.
    I decided to sell the condo for 290K and the Shophouse for 300K.
    Under the exemption rule where there is no gain or loss clause,can these apply to me, if I sell them within 2 years period.
    I would greatly appreciate if you could guide me to the correct Govt Dept to seek comfirmation.

  • Abdul Raouf Al Marzouqi

    Hi, Iam a foreigner i bought the unit from developer on 08-07- 2008 for 350,000 and sold for 405000 The SPA was stamped on 16-11-2011 The purchaser lawyer less my money 2% for RPGT = RM 8100 AND AGENT COMMISSION 3% = RM 12150 please i need help if they have done properly or not because they did not give me any prove of payment on RPGT.

    • Hi Raouf, you can request a copy of acknowledgement from your lawyer for submission of Form to LHDN (IRB). LHDN will reply to you via normal postage few months later (after assessment by LHDN).

      If there is any payment, sure there will be official receipt from LHDN. Ask a copy for that from lawyer.

  • kumaravel

    i have disposed my house recently and paid rpgt on the gain. I have also received late payment interest for delay in the payment later on. is the late payment interest subject to tax or rpgt. how do i file it.

  • Hew YL

    May I ask what is this 6%GST for sale of property? I even received an official receipt from my broker. Is this additional tax we have to pay on top of RPGT?

    • Hew, there is no GST for sale of property and the only tax in this transaction is RPGT.

      That might be the service tax for services (Agent commission) rendered by your property agent. You may clarify with him/her.

  • Angelina

    Hi Angelina

    Sold my property, received the 10% deposit and now waiting the process completed to get the balance gain :-)

    The problem is..I can’t proceed with RPGT exemption due to 1. No copy of CF 2. Both TNB and SYABAS bill not under my name (still under previous owner)..

    Seaching copy of CF from developer and Majlis also fruitless.

    This will cost me more than 10k..lawyer also can’t help (im using same lawyer as buyer)

    I wish i know somebody that can make it through even i need to pay some service charge

    Any suggestion?

    • Hi FSM, it’s quite a shock to me if you can’t claim RPGT exemption. Let me call my lawyer on this & see what they say about this.

    • Hi FSM, just spoken with my lawyer and the request of CF or TNB/Syabas bill is to prove that the property is used for residential purposes.

      You have to take the trouble to visit TNB/Syabas office to make the change of account holder’s name under yours. This will only take half day there, I think.

      Secondly, you have to try your best to get the CF from the Majlis. If you can’t, the other option is to get it from your neighbours, just offer them a cup of coffee or a dinner of pizza if they can help you out. :)

      Emm, using a same lawyer as the buyers’ one is not a good idea. I have experienced once & will never do that again. Please monitor closely with your lawyer’s performance and make sure they are independent and not biased to buyers’ side. :)

  • Thanks Angelina..really appreciate that

  • Hi Angelina

    Thank you very much for your advice..very helpful

    Will try to get it and see how its goes

    Thanks again

  • SF LEE

    Hi, I bought a house on Nov 2009 and I want to sell now so the RPGT will be 10%.

    examples:
    buy the house at 200k
    sell the house at 280k
    legal fees + stamp duty fees etc = 5k
    renovation cost = 45k
    so means 80k (earn) – 50k = 30k.
    is it means the 10% of 30k or 10% of 80k, how much I need to pay the tax ?
    What is the tax exemption?

    • SF Lee, if this is your first house, then you can choose whether to claim or not to claim for the full tax exemption.

      The renovation cost incurred is not considered as part of the cost, so you can’t deduct from the gain.

  • Fong Weng Hung

    Hi Angelina

    You mentioned earlier the new RPGT is effective from 1/1/2012, does that mean properties sold in 2011 are not subjected to RPGT?

  • hi angelina
    I purchase a house under my company name sdn bhd (director me and my dad only)last year march s n p 2011 and would like to dispose this year may. would the company entitlec for once in a life time waiver..? Or if not how much should i pay the rpgt, 5% or 10%? When i signed the s np last year, it was still before govt new rpgt revision policy, so will i enjoy the 5% gain tax?

  • @jefry, your rpgt will be 10% on gain & company do not entitle for the waiver.

  • aileen

    Hi angelina,
    Will be selling an office lot which is within 4 years after purchase and falls under the 5% RPGT. Unit has been vacant since handover as I have not been able to secure a tenant. For the RPGT, besides deducting legal fees, agent commission + 6% govt tax, can I also deduct the following?

    1. Building maintenance charges
    2. Fire Insurance
    3. Quit Rent

    Secondly, can I apply for tax exemption for 1st property disposal for an office unit?

  • Hi Angelina,

    I read some website mentioning about “An amount of RM10,000 or 10% of the chargeable gain (whichever is greater) can be exempted in RPGT”

    This exemption can be applied to every RPGT?

  • Hi Angelina,

    I am selling my house in Kota Kinabalu. Bought it in Dec 2008 and selling it in May 2012 ( less than 5 years)I found a buyer and he engaged a lawyer to arrange for the S&P agreement. The lawyer firm told me that I need to pay 2% out of the selling price to LHDN.

    I mentioned about according to the 2012 RPGT, it is subjected to only 5% RPGT. The lawyer firm mentioned that Sabah is different from West Malaysia.

    Is this true?

  • Hi, I acquired a double storey house by way of Grant of Probate dated 13th May 1997. The transfer was only effected in the year 2011.
    I have recently entered into an agreement to sell the said property.
    I was informed by my lawyer that i am taxable as i only acquired the said property last year. Is it true?
    Secondly , is there any exemption for disposal of property that was acquired by way of gift and affection from parents?
    Thank you.

  • how much will be the total legal fees with the 2% lawyer’s fee for a sale of RM450k?

  • hi , i bought my property with my husband who is an australian citizen in 2009 .Now when selling it can i get exempted from tax ( ist house selling ) Tq

    • Anita, you will be able to claim the exemption but not for your husband as he is not a citizen or permanent resident of Malaysia.

  • I am now selling a new house almost reaching final developer handover stage. My original buying s and p was dated August 1st 201O. I got lawyers that give me conflicting info. One said I should have new selling S and P dated August 3rd 2012 to enjoy RPGT of 5%. Two other lawyers said date does not matter as we can claim 5% RPGT irregardless of the 2 years. Who is correct ???????

    • Hi John, purchase date = 1/8/2010, disposal date = 3/8/2012, so the property is to be sold after holding for more than 2 years, thus 5% RPGT is applicable.

      I have no idea why the 2 other lawyers said so but I can’t find myself to agree with them.

  • Billie

    Hi, i am a joint buyer on 2007, on 2009 i buy over another halfshare from partner and now if i want to sell it, is this still consider my 1st property? or i have to pay RPGT and it is base on 2007 or 2009?

  • I sold my first property in 2007… I’ve a lawyer handle the procedure…but I’m not sure if my lawyer used my one time tax exemption when doing the procedure. How can i know if I still have the tax exemption right?

    Thks! PC – Penang

    • Hi PC, not much info from your inquiry. You may check with your lawyer and try to have a copy of the Form CKHT 3 (NOTIS MENDAPATKAN MAKLUMAT DI BAWAH SEKSYEN 27 AKTA CUKAI KEUNTUNGAN HARTA TANAH 1976) that he submitted for you.

  • My father in law own a old shop lot (> than 10 years)which he put his 3 sons name on the house. Now he wish to sell. Of course, we let him keep the revenue from the sell. My question is, how the 3 sons need to declare the sell profit does not go to them? What procedure or paper document might involved? Which department should they refer to? Thanks in advance

    • hi PC, since the shoplot has been purchased for more than 10 years, there will be no RPGT. All profits made will be tax free.

      Please let the lawyers do the jobs to reduce all the hassle, your lawyers will charge you each one at probably RM200. It worth to pay.

      RPGT is under Lembaga Hasil Dalam Negeri (Inland Revenue Board).

  • Hi Angelina

    Succesfully sold my property..and I start loved to buy and sell more..Thanks a lot for your advice :-)

    Short Q..how long normally it takes for LHDN to process the RPGT exemption? Until they get the approval result, does the lawyer have the right to hold this payment?

    My lawyer still hold my 5% RPGT exemption money :-(

    Thanks

    • Hi FSM, congratulation!

      It is very subjective and nothing you can do but to wait for the outcome/clearance from LHDN. You may check with your lawyer for possible timeline on this.

      Wish you a great success in investment! See you again!

  • for Joint name property, owner 1 has exercised the exemption but owner 2 has not. Can owner 2 exercise the exemption and how is the RPGT payable for owner 1? is it 50%?

  • Sathiya

    Hope someone can help clarify some of my concerns here.

    We have 1 lot of land in Seremban. the land belonged to my grandparents but the ownership had been transfered to their children since they are no longer alive.

    My father was 1 of the 9 children who had a share in this land. My father passed away in 2010, so my father’s share had been passed on to my mother.

    If we are to sell our share of the land, do we have to pay any property gain tax for the land? The lawyer say’s the tax amount can be up to 30%.

    Is there any exemption for this? the land share is currently under my mother’s name and this would be the first time she is selling any property. hope someone can help clarify as 30% tax is really high.

    • Hi Sathiya, please refer below for my reply:

      First, you can’t claim RPGT exemption for disposal of land.
      Second, When had the ownership been transferred to your mother & what was the market value of the land share?

      The purchasing price would be the market value of the land at the time your mother legally received the estate (share of land).

      Gains = Selling price > (more than) purchasing price.

      The tax will be based on the amount of gains & what rate to be applied.

      Hope the above are sufficient to you and wish you happy holidays!

  • I invested into shares in a property development Sdn Bhd 3 years ago. I want to sell them off now and had been informed that I have to pay RPGT as the Sdn Bhd is a RPC. I am not certain of this point as the Sdn Bhd itself treats its land as trading stock and any profit derived is taxed as business profit. The Sdn Bhd falls into the 75% RPC category in terms of landed property.

    • CSK, it will be quite difficult to prove that the land is held as trading stock since the land is not sold/developed. But it is for sure that if the land contribute more than 75% value over the assets held by the company, then it is considered RPC.

      As such, it is easier for the IRB officer to make decision based on the above assumption.

  • robert

    Halo, is there a limit for the first house tax exemption, regardless of how much I earn from the disposal? How about the RM10k or 10% exemption? Some comments keep mentioning this. Please advise.

    • Hi Robert, there is no limit over the first house tax exemption.

      The RM10k or 10% exemption is applicable to normal transaction where you do not claim first time tax exemption.

  • Mey Yeng

    Hi

    Goodday to everyone.

    I have a query and hope you could help to provide an answer. Most of the write-outs hardly mentioned about Malaysian with a non-resident status. For this particular category what is the property gain tax rate. I personally went to the Inland Revenue Department in Wangsa Maju and was told disposal of a property over 2 years was 30% but information from 3 lawyers that I talked to was 5 %.

    Please advise. Thank you.

    • Hi Mey Yeng, based on my past experiences dealing with IRB, the IRB officer was wrong. Please visit IRB at Jalan Duta and look for Technical Department where you can find more accurate answer.

      Resident or Non-resident status in tax is not relevant in RPGT, it is more on the holding period.

      RPGT is applicable to the following three categories:
      1. Disposal by a company
      2. Disposal by persons other than companies
      3. Disposal by an individual who is not a citizen or permanent resident

      All of the above three categories are having the same tax rates in RPGT.

      P/S: Resident or Non-resident is only applicable in Income Tax Act.

  • Hi, Angelina,

    I inherit a shop house (which was bought some 30 years ago) last month and I am going to sell it now. What is my liability of RPGT. Can I claim for RPGT examption as it is my first property sale?

    Thank you,
    Mary.

    • Hi Mary, first house tax exemption in RPGT is applicable to Residential Unit only. I might afraid your unit is considered Commercial Unit and thus making you unable to claim any tax exemption.

      If you just inherited the property last month, you are deemed to purchase the property at current market value, if you sell it now, there will be not much RPGT since you are also selling at the most current market value (no gain).

  • Thank you, Angelina. I really appreciate your prompt reply.

  • Patrick

    If a Company A acquired 100% interest in Company B which is a RPC whose is holding a property for more than 5 years. Subsequently Company B disposed the said property to Company A at a gains. Whether such gains on disposal is exempted from RPTG, because property itself is more than 5 years but the property attached to PRC shares is less than 2 years.

    • Hi Patrick, the previous shareholders would like the one who were subject to RPGT at time they disposed of the shares in Company B to Company A.

      Since Company B is now 100% subsidiary of Company A, any transfer of property within the Group will be exempted in RPGT & Stamp Duty.

      For more details about transfer of property within the group, please visit: http://www.nbc.com.my/blog/gains-on-disposal-of-properties-that-are-exempted-from-tax-rpgt-exemptions/

      You will see this paragraph in that page:

      Real Property Gains Tax (RPGT) exemptions are available in the following circumstances:
      (a) Transfers within the same group to bring about greater efficiency and for a consideration consisting substantially of shares in the transferee company.

  • THIS COMMENT SECTION IS CLOSED.

    You may leave your inquiry or comment at the following:

    http://www.nbc.com.my/blog/budget-2014-30-rpgt-for-first-3-years/

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