According to the Real Property Gains Tax Act 1976, RPGT is a form of Capital Gains Tax in Malaysia levied by the IRB. It is chargeable upon profit made from the sale of your land or real property, where the resale price is higher than the purchase price.
RPGT is generally classified into 3 tiers:
- Individuals (Citizens & Permanent Residents)
- Individuals (Non-Citizens/Foreigners)
It was first implemented in 1995 and it has seen quite a few changes over the years. The most recent RPGT amendment which was announced during Budget 2019 and implemented in January 2019 was the seventh one so far – where Malaysians who are selling off their property in the sixth (and subsequent) years of ownership will now have to pay a 5% RPGT. Foreigners and companies will also see an increase in RPGT rates, from 5% to 10%.
Previously, Malaysian homeowners who sell off their properties after the 5th year of ownership are not required to pay any RPGT on the profits earned from the sale. Meanwhile, companies and foreign homeowners were required to fork out 5% for RPGT.
New RPGT Rates from January 2019
|RPGT Rates||Individual (Citizens & PRs)||Individuals (Non-Citizens & Foreigners)||Companies|
|Disposal in 1st Year||30%||30%||30%|
|Disposal in 2nd Year||30%||30%||30%|
|Disposal in 3rd Year||30%||30%||30%|
|Disposal in 4th Year||20%||30%||20%|
|Disposal in 5th Year||15%||30%||15%|
|Disposal in 6th Year||5%||10%||10%|
RPGT 2020 Exemptions
In light of the Covid-19 outbreak, Prime Minister Tan Sri Muhyiddin Yassin introduced several incentives during the PENJANA briefing on 5 June to help boost the property market and provide financial relief to homebuyers and homeowners. These include the reintroduction of the HOC 2020 (Home Ownership Campaign) which features stamp duty exemptions as well as special RPGT 2020 exemptions. Malaysians will be exempted from paying the 5% (or higher) RPGT for the disposal of residential property from 1 June 2020 and 31 December 2021. The exemption is limited to the disposal of three units of residential homes per individual.
AdrianYeo tax team handles every aspect of your property tax administration and management to help you minimize property tax obligation, implement strategic property tax planning and reduce administrative burden. We understand the unique complexities of all property types—including retail, office, industrial, multifamily, hotels and special use properties—and we have specialized knowledge of local processes and particular jurisdictional procedures.
Managing a business can be challenging enough without having to wonder if the tax planning process is on track. All businesses should work with a firm that can provide reassurance that they are in the best tax position possible. If you are looking for assistance tax planning and compliance, AdrianYeo can help. For additional information call us at +60 3-7802 3333 or request for a callback to speak to one of our audit managers.