Budget 2013: Higher Real Property Gains Tax (RPGT) Rates

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Budget 2013: Higher Real Property Gains Tax (RPGT) RatesThe limited supply of real property especially in urban areas has provided opportunities for speculative activities.

Therefore, the Government proposes the real property gains tax (RPGT) from the disposal of properties made within a period not exceeding 2 years from the date of purchase will be taxed at the rate of between 15% and 10% of disposal of property within a period of 2 to 5 years.

For property disposed after 5 years from the date of acquisition, RPGT is not applicable.

real_property_gain_tax_ratesThe RPGT rates increase is applicable to disposal of property taking place on or after 1 January 2013.

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26 COMMENTS

  1. Is the 5 years include construction period of the property?

    Eg: Sign SPA this Dec 2012, property to be completed in Dec 2015. If disposal in Jan 2018, will the RPGT apply?

    • No, Lee, the period is to be counted from the date of purchase.

      No RPGT if disposed in 2018. Hope it helps.

  2. 0% RPGT for owner who disposal it after 5 years, is this apply to Malaysian owners only or even to the foreigner owners as well?

  3. Has the new real property gains tax rate as proposed during the Budget 2013 been gazetted?

  4. May I know the RPGT tax by 15% based on what amaount ?

    Is based on the profit of the again dsiposal & minus the expenses that incurred on that property?

    For example, the property bought at RM 100k. I sell to buyer at RM200k within 2 years. Then the legal fee & stamp duty incurred that time is RM 5k.

    So is the RPGT tax calculation as below:

    profit on disposal= RM 100k x 15% =RM 15k less RM5k= RM 10k.

    Am I right ?

    • Hi Teoh, the correct calculation shall be as follows:

      Gain on the disposal = Sales – (purchase price + direct costs)
      Gain = RM200,000 – RM100,000 – RM5000 = RM95k
      Tax of RM15% will be imposed on the gain of RM95k.

      Please note that legal fees incurred for buying & selling the property are also deductible. Agent fee as well.

  5. I’d appreciate it if anyone could advise how and when we should declare the RPGT? Is it only done once a year when we declare our usual and annual income tax or it has to be done whenever there is a Gain on the Property sales/disposal?
    Wondering is there any specific Tax forms(from the IRD) to be used for the RPGT declaration?
    I’d appreciate your kind advice.

  7. How about i sold off the house which the purchase date 2011 1st Jan, that’s mean use the existing calculation or the new calcalation?

  8. Dear Angelina,
    I’d appreciate it if you could advise how and when we should declare the RPGT? Is it only done once a year when we declare our usual and annual income tax or it has to be done whenever there is a Gain on the Property sales/disposal?
    Wondering is there any specific Tax forms(from the IRD) to be used for the RPGT declaration?
    Thank you

  9. For example, the property i bought at feb 2010 RM 224k. I sell RM418k at aug 2013. Then the legal fee & stamp duty around 5k and 8k commission
    So how is the RPGT tax calculation? and what other cost that i can deduct from my gain profit?

    can the below item deduct from the gain profit ?
    1) penalty from bank
    2) Bank Loan interest
    3) Quit rent
    4) assessment

    or can you provide me list of cost that i can deduct from the gain profit ..

    thank you very much

    • Hi Eric, all of the following are not deductible when arriving the gain on the disposal:

      1) penalty from bank (this is cost arising from the finance, not for the property)
      2) Bank Loan interest (revenue in nature)
      3) Quit rent (revenue in nature)
      4) assessment (revenue in nature)

      items 2-4 are deductible to the rental income earned from that property, but not for RPGT.

  10. Hi Angelina,

    If the land (agriculture land) sold is based on Sale and Purchase Agreement with a consideration less than RM40K together with the Power of Attorney entered between the seller & buyer which the draft title is still under seller’s name but has Power Attorney’s particulars, whether the seller subject to RPGT??

    Power of Attorney grant by the seller to the buyer.

    Seller accepted government offer of the land (both lands) on year 1996 & 1997 and sold to the buyer on year 1998 (by way of sale and purchase agreement & power of attorney).

    Thanks your reply.

  11. I sold my house to a a foreigner last year. She applied for foreign consent. I filed the CKHT 1A 60 days exactly 60 days from the date of receipt of the Consent as the Purchaser opened her tax file late. I am snapped with a 10% penalty.

    My question is whether its 60 days from the date of Consent or 60 days from the receipt of Consent.

  12. Let say, I have purchased a property in March 2010 and if I sell it immediately AFTER March 2015. So, will I still need to pay RPGT then?

    Thank you.

  13. Hi Angelina,
    I understand that transfer of property from parents to child is free of RPGT and MOT stamp duty. How about the other way round which could be relevant for non-resident citizens who wish to provide an income stream for their parents.

    Thank you for your reply.

  14. For expats what is the implication of RGPT. I heard it is 30% of the total then after 5 years 25%.. Is this correct? right now I am considering buying as I love Malaysia, but if this so I will reconsider this decision.

    • Hi Alan, for expatriate, it is categorised as non-citizen, in which gain on disposal of real property is subject to a flat of 30% if the disposal takes place within 5 years from the date of purchase. From 6th year onwards, 5% on gain of disposal is applicable. RPGT is imposed on the gain of disposal, not on the entire disposal proceeds.

  15. Hi Angelina,

    Bought a property under my name & my ex-wife name on year 1996. On year Dec 2008, my ex-wife divorce from me & transfer the half portion property to me. If I were to sell the above property on year Oct 2013. Does it base on 1996 or 2008? Am I exempted from RPGT?

    Thanks for your reply.

    • Hi Yong Chang, transfer between husband and wife, parent and child or grandparent and grandchild are deemed to be “No gain no loss” transactions.

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

      “No gain no loss” transaction means the disposal price is deemed equal to acquisition price.

      In your case, your acquisition price for your wife portion will be deemed as the purchase price at 1996.

      Your new 1/2 portion will subject to RPGT. This will be your 5th year & 10% rate will be applicable.

      Your original portion will be tax free.

      All the above are correct if the property is residential unit.

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