Real Property Gains Tax
Real Property Gains are gains derived from disposal,
sell, convey, assign, transfer, settle or alienate whether
by agreement or by force of law which fall under chargeable
asset. Every person whether or not resident is chargeable to
Real Property Gains Tax (RPGT) on gains arising from
disposal of real property, including shares in a real
property company (RPC). All chargeable assets must be made
during the year of assessment and all particulars must be
furnished as requested.
| Disposal Period | Companies (%) | Individuals (%) | Individuals*, Companies* and Executor of deceased estate (%) |
|---|---|---|---|
| Within 3 years | 30 | 30 | 30 |
| In the 4th year | 20 | 20 | 30 |
| In the 5th year | 15 | 15 | 30 |
| In the 6th year onward | 10 | 5 | 10 |
* Non-citizens, non-permanent residents and companies not incorporated in Malaysia
RPGT Base Year
The base year for the Real Property Gains Tax (RPGT) has been revised to Jan
1, 2013 for assets acquired before the date, from Jan 1, 2000 previously.
This was done during the tabling of Budget 2020, which is imposed on profit earned by homeowners and businesses by selling property.
The shifting of the base year for the RPGT translates into lower tax payment,
given the nature of appreciating property prices. Now that the base year has
been shifted to Jan 1, 2013, sellers that intend to dispose of their property will have to pay tax based on the difference in the value of their property between 2013 and
to-date, a figure smaller than the difference in price between 2000 and to-date.
The date of disposal is taken as the date of the written
agreement of the disposal. In the absence of a written
agreement, the date shall be taken as the earlier of full
payment of the purchase consideration or the date when all
things which are necessary for the transfer of ownership of
the real property under any written law has been done. Where
the disposal is subject to approval from the Government or
State Government, the date of disposal is the date of such
approval or if the approval is conditional, the date when
the last condition is satisfied.
Exemptions
The following are some examples of exemptions from RPGT:
• an amount of RM10,000 or 10% of the chargeable gain,
whichever is greater, accruing to an individual.
• gain accruing to an individual who is a citizen or a
permanent resident in respect of the disposal of one private
residence.
• disposal of assets in connection with securitisation of
assets.
• disposal of assets to REITs and Property Trust Funds.
• disposal of low cost, medium low and affordable
residential homes of RM200,000 and below, in the 6th and
subsequent years.
• disposal of residential properties by Malaysian citizens
during the period 1 June 2020 to 31 Dec 2021 (limited to 3
units per individual).
The following are some examples of transactions where the
disposal price is deemed to be equal to its acquisition
price:
• devolution of assets of a deceased individual.
• transfer of assets (owned by a citizen) between spouses.
• gifts made to the Government, State Government, local
authority or approved charity.
• disposal of asset as a result of compulsory acquisition
under any law.
• disposal of chargeable asset pursuant to a scheme of
financing approved by the Central Bank of Malaysia, Labuan
FSA, Malaysian Co-operative Societies Commission or the
Securities Commission as a scheme which is in accordance
with the principles of Syariah.
The following are some examples of transactions where the
disposer is treated to have received no gain and suffered no
loss from the:
• transfer of real property with prior approval of the Director
General of IRBM
by a company to companies in its same group to bring about
greater efficiency in operation for a consideration
consisting of not less than 75% in shares.
• transfer by way of gift between husband and wife, parent
and child, or grandparent and grandchild, provided the donor
is a citizen.
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