Real Property Gain Tax (RPGT)
RPGT is a tax on chargeable gains which is the profit we get when the disposal price is more than purchase price of the property. You will be only be taxed on the positive net capital gains which is disposal price less the purchased price less the charges such as stamp duty, legal fees, advertisement charges, etc. Additionally, a waiver on the taxable amount is granted to individuals (but not companies). The holding period is from the date on the S&P agreement till the disposal date.
The formula is as below:
Chargeable Gain = Disposal Price – Purchased Price
Net Chargeable Gain = Chargeable Gain – Exemption Waiver (RM10,000 or 10% of Chargeable Gain, whichever is higher)
Tax payable = RPGT Rate (based on holding period) * Net Chargeable Gain
|Holding Period||Citizen or Permanent Resident||Company||Non-Citizen or Non-Permanent Resident|
|Within 3 years||30%||30%||30%|
|In the 4th years||20%||20%||30%|
|In the 5th years||15%||15%||30%|
|Beyond 5th years||0%||5%||30%|
There are some exemptions allowed for RPGT.
The Exemptions are:
- Exemption on gains from the disposal of one residential property once in a lifetime to individual (please utilise this once in lifetime opportunity wisely).
- Exemption on gains arising from the disposal of real property between family members (e.g. husband and wife; parents and children; grandparents and grandchildren).
- 10% of profits OR RM10,000 per transaction (whichever is higher) is not taxable.