Tag Archives: Malaysia RPGT

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.

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Real Property Gains Tax in Malaysia

Property prices are not expected to drop substantially. While there will be a property market correction, a crash is very unlikely in Malaysia. We are not going to see many fire sales, buyers defaulting on loans or subprime crisis.

Real Property Gains Tax

Our government had increased the real property gain tax (RPGT) in Budget 2012 to cool the property market. Effective from Jan 1, 2012, RPGT will be imposed 10% for properties disposed of within 2 years. Thereafter, a RPGT of 5% will be imposed on properties disposed of between 2 and 5 years of purchase. This replaces the RPGT of 5% for all properties disposed of within 5 years, which was implemented on Jan 1, 2010.

Example:

Mr. Lim purchased a property on year November 2009 at RM190,000 and sold on March 2012 at RM265,000 (within 2 and 5 years of purchase). He made RM75,000 from the transaction and the gains are subject to 5% RPGT:

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