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What is RPGT
RPGT is levied on chargeable gains from the disposal of chargeable assets such as houses, commercial buildings, farms, and vacant land. With effect from 21 October 1988, RPGT was extended to gains from disposal of shares in real property company (RPC).
“Gain” – According to the Income Tax Act 1967, “income” refers to taxable or exempt income or income other than profits or, in the case of unit trusts, profit excluding income.
“Asset” includes any land located in Malaysia, and any interest, option, or other right in such land.
RPGT Exemption
According to the Income Tax Act 1967, RPGT exemption only applies to the following conditions:
1. The exemption of Paragraph 2 or Schedule 4 is available to individual only and is allowed as follows:
2. Exemption under Section 8 can only be granted under the following conditions:
Individuals are granted a once-in-a-lifetime exemption on the Real Property Gains Tax (RPGT) arising from the disposal of a private residence. A private residence is defined as a building or part of a building in Malaysia that is owned and occupied by the individual, or is certified fit for occupation as a place of residence.
This exemption is available only once in a lifetime per individual. However, no election for this exemption can be made if the individual has already been granted an exemption under the repealed Land Speculation Tax Act 1974 for a similar disposal.
‘Residential property’ refers to house, a condominium unit, an apartment or a flat in Malaysia including service apartments and a small office home office (SOHO), owned by an individual, jointly or surely, and only used for residential purposes.
Self-Assessment and Filing
The RPGT system transitioned to self-assessment. Sellers must calculate and file their RPGT via the MyTax portal using e-CKHT tools; no assessment notice will be issued.
RPGT Rates in Schedule 5
| Disposal Period | Disposal within 3 years after the date of acquisition | Disposal in the 4th year after the date of acquisition | Disposal in the 5th year after the date of acquisition |
Disposal in the 6th year onwards |
|
| Part 1 | Other than Part II and Part III
(individuals, partnerships, executor of the estate of a deceased person who is a citizen or a permanent resident) |
30% | 20% | 15% | 0% |
| Part 2 | Company incorporated in Malaysia or trustee of a trust
(Company, co-operative, association, society and organisation) |
30% | 20% | 15% | 10% |
| Part 3 | Individual who is not a citizen and not a permanent resident, or an executor of the estate of a deceased person who is not citizen and not a permanent resident, or a company not incorporate in Malaysia | 30% | 30% | 30% | 10% |
