Real Property Gains Tax (RPGT) is charged on gains arising from the disposal of real property situated in Malaysia or of interest, options or other rights in a property as well as the disposal of shares in real property companies (RPC).
RPGT is calculated based on the gains between the selling price and original purchase price (plus other costs) of a property. The rates of RPGT for individual are as follows:
How to calculate RPGT?
In order to calculate the actual RPGT, you will need to determine the gains & the holding period.
Here is the example for a property disposed at the 5th year in 2014.
|Less: original purchase price plus other costs||(500,000)|
|Less: Exemption of RM10,000 or 10%||(30,000)|
|RPGT tax at 15%||40,500|
Friendly Reminder: You will not only need to pay RPGT of RM40,500, you will also need to pay stamp duty (RM18,000) & lawyer fee (RM5,000) when the above property is disposed.
Click here for How to determine purchase price & lower RPGT?
Exemption of RPGT
However, RPGT is exempted or no RPGT is levied for disposal of real property or shares in real property companies held for more than 5 years. You are tax free to sell in 6th year onwards.
Some tax exemptions are available for individuals, even though they are disposed of within the first 5 years from the date of purchase:-
- Disposal of a residential property once in a lifetime by an individual.
- Transfer as gifts between parent and child, husband and wife, grandparent and grandchild (transfer between sibling/brothers or sisters is not applicable); and
- Exemption of RM10,000 or 10% of the chargeable gain, whichever is greater, for each disposal of a property by an individual. Chargeable gain is generally meaning sale proceeds less purchase cost.
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Note: This article was originally written by