Tag Archives: RPGT Rates

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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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

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