Real Property Gain Tax (RPGT)
- Jerro Loh
- Jan 2
- 4 min read
What Is Real Property Gain Tax (RPGT) ?
RPGT is a capital gain tax imposed to the seller(s) when a real estate / property / shares in a real property company is sold and the seller(s) profits from the disposal of the real estate / property / shares in a real property company
Who Charges the Real Property Gain Tax (RPGT) ?
Inland Revenue Board of Malaysia
Who Are Applicable to Real Property Gain Tax (RPGT) ?
Malaysia Citizens, Permanent Residents, Foreigners and Companies
Real Property Gain Tax (RPGT) Rate
Malaysia Citizens, Permanent Residents, Executor of The Estates of a Deceased Person Who is a Malaysia Citizen or a Permanent Resident
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Company Incorporated in Malaysia or Trustee of a Trust
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Foreigners, Not a Malaysia Permanent Residents, Executor of The Estates of a Deceased Person Who is Not Malaysia Citizen nor Not a Permanent Resident of Malaysia or a Company Not Incorporated in Malaysia
(RPGT) Rate | |
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Disposal and Acquisition Date
It is very important for seller(s) to clearly identify the Acquisition Date and the Disposal Date of the said property as this will determine the Real Property Gain Tax Rate imposed to the seller(s)
Disposal Date
The date that the Seller(s) sell the said property
a) On the date of agreement if there is a written agreement (Usual Practice the written agreement will be the Sales and Purchase Agreement)
b) If there is no written agreement, it will be on the date of completion of the disposal (sale of the said property)
The date of completion of a disposal is :
- The date the ownership of the property is transferred by the seller(s) or
- The date on which the seller(s) received the total sale price of the said property
* Whichever is earlier
Acquisition Date
The date that the Purchaser(s) buy the said property
a) On the date of agreement if there is a written agreement (Usual Practice the written agreement will be the Sales and Purchase Agreement)
b) For Executor (Inherited the said property from another individual), the acquisition date is deemed to be as the date of death of the deceased
Withholding By Purchaser(s)
During a Sale and Purchase of a property, the purchaser(s) are required to retain certain percentage of the total Purchase Price for the purpose of Real Property Gain Tax (RPGT) payment on behalf of the seller(s). In usual practice, this will be done by the purchaser’s solicitor.
The amount to be retained by the purchaser(s) are as follow :
a) If the seller is Malaysia Citizens, Permanent Residents, Executor of The Estates of a Deceased Person Who is a Malaysia Citizen or a Permanent Resident
: 3% of the Total Purchase Price
b) Foreigners, Not a Malaysia Permanent Residents, Executor of The Estates of a Deceased Person Who is Not Malaysia Citizen nor Not a Permanent Resident of Malaysia or a Company Not Incorporated in Malaysia
: 7% of the Total Purchase Price
The retained amount must be submitted to the Director General of Inland Revenue Board of
Malaysia by the purchaser within 60 days from the date of acquiring of the said property (In normal practice will be the date of the Sale and Purchaser Agreement)
Payment of Real Property Gain Tax (RPGT) by Seller(s)
The seller(s) is required to settle the balance of the Real Property Gain Tax payable within 30
days from the date of notice of assessment by the Inland Revenue Board
Exemptions
- For Individuals, an exemption of an amount of RM10,000 or 10% of the chargeable gain, whichever is greater
- For Individual Malaysia Citizens and Permanent Residents, an Once in a Lifetime FULL EXEMPTION of the chargeable gain for the disposal of one private residence
Disposal Price are deemed to be equal to it’s Acquisition Price
- Devolution of assets of a deceased individual (Inheritance of property)
- Transfer of assets owned by spouses (Only applicable to Malaysia Citizens)
- Disposal of asset as a result of compulsory acquisition under any law
- Gifts made to the Government, State Government, Local Authority or Approved Charity
Seller(s) are deemed to have received no gain nor suffer any loss
- Transfer by way of Gift between :
Husband & Wife
Parent & Child
Grandparent & Grandchild
* Seller(s) must be Malaysia Citizens
Real Property Gain Tax (RPGT) base year amendment to year 2013
The government will use the market price on 1st January 2013 as initial point of valuation for all property purchased before the year 2013 for the purpose Real Property Gain Tax Calculation
Disclaimer : All the information contained in this article is for general guidance on the matters of interest only. Nexcap Property Consultants Sdn Bhd has made every attempt to ensure the accuracy and reliability of the information provided in this article. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in information contained in this article. Nexcap Property Consultants Sdn Bhd will not be responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever resulting or arising directly or indirectly from your reliance on the information and material in this article.
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