Real Property Gains Tax (RPGT) Rates Increased in Malaysia

As everybody known, the RPGT rates on gains has been raised from disposing of real properties with effect from 1 Jan 2014.


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Under this new property ruling, any gains on properties sold within the period of the first 3 years, the RPGT rate is increased to 30% to individual and companies as well. Those holding within the period of 4 and 5 years, the RPGT rates were increased to 20% and 15% respectively. However, for properties sold in the 6th year or thereafter, no RPGT is imposed on any transactions happen on residential units whereas commercial ones are taxed at 5%.


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For foreigners, the RPGT is imposed at a rate of 30% for properties sold within the holding period of 5 years, and RPGT rate is imposed at 5% for any properties sold in the 6th year and thereafter.

Illustration

Let say Mr. Lee bought a unit of condominium from a property developer on 1st March 2012 at a price of RM 265,000 and sold his property on 1st Jan 2014 at RM 350,000. So, this property is sold within 2 years from the date of purchase.

The computation of RPGT is as below:

Disposal price = RM 350,000

Acquisition price = RM 265,000

Therefore the chargeable gain = RM 350,000 – RM 265,000 = RM 85,000

Net chargeable gain to be taxed = RM 85,000 – RM 10,000 = RM 75,000 (Exemption for individual of 10k or 10% whichever is higher)

Since Mr. Lee sold his property within 2 years from the date of purchase, so the tax imposed on RPGT was 30%

Tax payable = RM 75,000 x 30% = RM 22,500

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