How to Calculate Real Property Gains Tax?

Under Budget 2010, effective from 1st January 2010, Real Property Gains Tax (RPGT) has been re-imposed and it has fixed at 5% on the gains from the disposal of real property. The RPGT for the first year is 5% and it’s same for 2nd, 3rd, 4th and 5th year whereas previously the Real Property Gains Tax (RPGT) is progressive from 0 to 30 percent, depending on the property holding period.

Real Property Gains Tax

Previous Real Property Gains Tax RPGT Rates

The below rates apply for disposals before 1st Jan 2010.

Category of Disposal Rate of Tax (%)
Disposal within 2 years 30
Disposal in the 3rd year 20
Disposal in the 4th year 15
Disposal in the 5th year 5
Disposal in the 6th year and subsequent years 0

How To Calculate Current Real Property Gains Tax RPGT?

Mr. M purchased a property on year 2008 at RM100,000 and sold after or on 1st Jan 2010 at RM150,000. So, it’s within 5 years from the date of purchase. And, he gains RM50,000 from the transaction it’s subject to 5% Real Property Gains Tax(RPGT):

RM50,000 (Property Gains) – RM10,000 (Waived Exemption) = RM40,000 (Taxable Gains)

*Under Budget 2010, exemption up to RM10,000 or 10% of the gains or whichever is greater be given. Previously, only exemption of RM5,000 or 10%of the chargeable gain, whichever is greater.

According to the above scenario, 10% of the gain (i.e. RM5000) is less than the minimum exemption of RM10,000. So, the seller is entitled to the higher sum of RM10,000. He is allowed to deduct RM10,000 from his purchase price.

RM40,000 (Taxable Gains) x 5% (RPGT Rate) = RM2,000 (RPGT Chargeable)

So, the RPGT chargeable to Mr. M will be RM2,000 only.

3 thoughts on “How to Calculate Real Property Gains Tax?”

  1. How to calculate the real property gain tax for a house bought on yr 2002 at RM 190,000.00. Sold on year 2010 at RM 380,000.00?

    is’t 380k – 190k X 5% ?

    thank you.

  2. Sir

    How about penalty imposed by bank?

    I bought a house RM300K with 90% loan in August 2009

    After some reno, I got a buyer for RM420K which I think good offer to let it go…

    How much my chargeable RGPT?

    How much penalty normally imposed by bank?

    Appreciate your help 🙂

    Thank you

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