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Real Property Gains Tax (RPGT) in Malaysia (2024)

BY Team Loanstreet

Updated 01 Apr 2024

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The content and information on this article might be changed or updated periodically by Team Loanstreet without notice.

Selling a property can be a profitable move, but it's important to remember that there are taxes involved. In Malaysia, homeowners and businesses are subject to Real Property Gains Tax (RPGT) when they dispose of a property.

Essentially, if you make a profit from selling your property, you'll need to pay RPGT within 60 days of the sale. On the other hand, if you sell your property for less than you bought it for, you won't owe any RPGT.

To help you better understand RPGT, this article will cover some useful tools and information about how it's calculated, as well as some exemptions that may apply. Additionally, we'll provide tips on how to pay your RPGT.


What's covered in this article?

RPGT rates classification

The following are the RPGT rates effective January 2023:

Disposal Citizens / PR Non-Citizens Companies
Less or equal to 3 years 30% 30% 30%
Less or equal to 4 years 20% 30% 20%
Less or equal to 5 years 15% 30% 15%
Year 6th and beyond 0% 10% 10%

Source: LHDN

How to calculate RPGT? 


Image source: iProperty

RPGT is a tax on the profit you make from selling a property. This tax applies to both residents and non-residents, and it also applies to the buying and selling of shares in Real Property Companies (RPC), which are companies with at least 75% of their assets in properties.

When calculating the amount of RPGT you owe, you'll only be taxed on the net capital gains, which is the difference between the sale price and the purchase price, minus any related charges like stamp duty, legal fees, and advertising expenses. If you're an individual, you may also be eligible for a waiver on the taxable amount, but this isn't available to companies.

It's important to note that the length of time you hold the property also affects the RPGT you owe. The holding period starts from the date on the Sales and Purchase Agreement (S&P) until the disposal date. So, if you're planning to sell a property, be sure to factor in RPGT when considering your profits.

For a quick calculation, the formula is:

Chargeable Gain = Disposal Price - Purchased Price - Miscellaneous Costs
Net Chargeable Gain = Chargeable Gain - Exemption Waiver (RM10,000 or 10% of Chargeable Gain, whichever is higher)
Tax payable = RPGT Rate (based on holding period) * Net Chargeable Gain

If you'd like a simpler way to compute your RPGT, why not check out this handy calculator which will save you the hassle!

If you want to see a real example, here you go:

Let’s say you purchased a house 12 years ago for RM500,000, now you want to sell it. The market price of the house is now RM700,000. To calculate the chargeable gain we minus the price of RM700,000 from the original purchase price of RM500,000 and any miscellaneous cost, let's say we incurred a miscellaneous cost of RM10,000 from lawyer fees. The calculation goes as follows:

Chargeable Gain = Disposal Price - Purchased Price - Miscellaneous Costs
RM700,000 - RM500,000 - RM10,000
= RM190,000

Now, we move on to the net chargeable gain. As mentioned above we can deduct the exemption waiver.

Net Chargeable Gain = Chargeable Gain - Exemption Waiver (RM10,000 or 10% of Chargeable Gain, whichever is higher)
= RM190,000 -  (RM190,000 X 10%)
= RM171,000


Tax payable = Net Chargeable Gain  X RPGT Rate (based on holding period) 
= RM171,000 X 0%

You’ll pay the RPTG over the net chargeable gain. If you owned the property for 12 years, you’ll need to pay an RPGT of 5%. 


RPGT Exemptions

1. Once-in-a-lifetime exemption
This once-in-a-lifetime exemption amounts to RM10,000 or 10% of the chargeable gain, whichever is greater and only applies to Malaysian citizens and permanent residents. It also specifies that it is only relevant to residential properties such as a house, condominium units, apartments, or flats in Malaysia and includes a service apartment and small office home office (SOHO).

2. Disposal of low-cost residential homes of RM200,000
The disposal of low or medium-cost homes priced or valued below RM200,000 is exempted from RPGT. This RPGT exemption only applies to Malaysian citizens. 

Allowable Loss

It's a fancy way of saying that if you sell more than one property in a single year, and you end up making a loss on one of them, you can use that loss to reduce the tax you have to pay on any gains you made from selling the other properties.

For example, let's say you sold your beach house and made an RM50,000 profit, but then you also sold your cabin in the woods and made an RM5,000 loss. In this case, you can use the loss from the cabin sale to reduce the tax you owe on the profit you made from the beach house sale.

It's a bit like balancing the scales - the loss helps to cancel out some of the gains.


Allowable Expenses

It refers to any additional costs associated with selling a property that can be deducted from the chargeable gain, which is the amount you're taxed on, to calculate RPGT.

Some examples of allowable expenses include legal fees, accounting fees, and valuation fees. If you used a real estate agent to help you sell the property, their commission can also be deducted. Other expenses such as administrative fees, maintenance costs, and the cost of advertising to promote the sale of the property can also be included.

In short, allowable expenses are costs that you incurred in the process of selling the property that can help reduce the amount of tax you owe on the profit you made from the sale.

How to make an RPGT payment?

  1. First, fill in the Property Disposal form (RPGT 1A). With this form, you must attach the Sale and Purchase Agreement (SPA) and all the documents that support the deduction that you want to apply for from RPGT.
  2. If you want to apply for RPGT/ RPGT exemption, you must also fill in the Information Notification Notice form under Section 27 A RPGT 1976 (RPGT 3).
  3. As a seller, you must also make sure that the buyer fills in the Certificate of Settlement (RPGT 4) form, which must be shared with a copy of the Sale and Purchase Agreement.
  4. Once you have completed all, submit the forms once with the supporting documents at the nearest LHDN branch within 60 days.

You can get the forms from any LHDN branch or download just download them from the LHDN website.

SIDE NOTE: For a quick calculation of RPGT, please use Loanstreet's RPGT calculator to get more accurate results. Also, the process of getting a loan for a property is a complex and tedious one. But, don't worry! Utilise our Home Loan Comparison tool to find out which loan is the best fit for you!

*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.


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About the Author

Team Loanstreet

Run by a professional human-sized team, get resourceful tips & guides from our very own library of financial articles that can help improve your financial lifestyle & make a well-informed money decision. We strive to provide you with the best service in helping you to get the most out of that DUIT!


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