RECENTLY PUBLISHED

Real Property Gains Tax Malaysia (RPGT): A Complete Overview

Updated on: Apr 2nd, 2024

15 min read

Investing or buying a property in Malaysia is completely a golden opportunity. It never depreciates except under certain circumstances. Malaysia is considered as one of the most desired place for investors especially in South East Asia. It has low cost of living with a developed infrastructure, less disaster-prone area and government incentives are the major attractions over here. Malaysia has imposed Real Property Gain Tax (RPGT) on gains arising from disposal of real property. In this article, we would be giving a brief overview of the same.

What is Real Property Gains Tax (RPGT)?

Real Property Gains Taxes are levied on disposal of chargeable assets such as houses, commercial buildings, vacant lands, farms, etc. The tax is imposed on disposers or sellers in the year of assessment when the sale takes place. Irrespective of the residential status of Malaysia, the same is taxable on the gains accrued on the disposal of chargeable assets situated in the Malaysia.

Further, the disposer can be a company, individual, partnership firm, organization, trustees or other chargeable persons. In common parlance, disposal is on transfer of ownership from one person to another whether by way of sale, conveyance, assignment, settlement, alienation, etc.

The tax is administered by the Inland Revenue Board of Malaysia (IRBM) under the Real Property Gains Tax Act, 1976.

Tax Rates and Exemptions in RPGT Malaysia

The tax rates differ according to the category of the disposer and their holding power. As per Schedule 5 of RPGT Act, the disposer is divided into three categories.

Part 1: It includes individual Malaysian citizens and partners.

Part 2: Disposer is a Company incorporated in Malaysia, or a trustee, trust, or body of persons registered under the law in Malaysia.

Part 3: It comprises of foreign nationals. The disposer is not a citizen, and not a permanent resident, or an executor of the estate of a deceased person who is not a citizen and not permanent resident or a foreign company.

Disposal Year	Part 1	Part 2	Part 3
1^st year	30%	30%	30%
2^nd year	30%	30%	30%
3^rd year	30%	30%	30%
4^th year	20%	20%	30%
5^th year	15%	15%	30%
Sale in 6^th year and beyond	0%	10%	10%

Filing and Payment of Real Property Gains Tax in Malaysia

The Real Property Gains Tax form must be filed by both the acquirer and the disposer. The filing process is as follows:

The disposer must fill in the form CKHT-1A whereas the acquirer has to fill in Form CKHT 2A. To claim tax exemption, Form CHKT-3 has to be filled.
Further, these forms can be filed either manually or online. These forms should be filled within 60 days of disposal.
To fill in the same manually, the form must be downloaded, printed and after the details are filed, the same has to be submitted to IRBM Office or the nearest Hasil office.
To fill in the same online, one can fill in the same by logging to website- https://mytax.hasil.gov.my/
While filing online, documents should be prepared for review. Post its submission, the forms can be printed or saved. It can be reverified through e-CHKT via IRBM website by entering identification number and password.

RPGT can be paid either online or through an offline mode. There are two ways in online either through MyTax Portal or e-PCB. If a disposer wants to pay in an offline mode, he can pay either through bank counters or POS Malaysia counters.

How to Calculate RPGT Malaysia

RPGT must be paid only if the disposal price is more than the acquisition price. However, there are certain other expenses too and other factors to be considered.

Particulars	RM
The amount or value of the consideration in money or money’s worth for the disposal of the asset.
Less: Allowable expenses The amount of expenditure incurred on the asset for the purpose of enhancing or preserving the value of the asset, being expenditure reflected at the time of disposal.
The amount of expenditure incurred in establishing, preserving, or defending disposer’s title or right over the asset.
The incidental cost of the disposal
The acquisition cost given by or on behalf of the owner (including adding the incidental cost of acquisition)
Compensation for any kind of damage to the asset or depreciation of the asset
Sum received under a policy of insurance or damage to the asset or depreciation of the asset
Amount of deposit forfeited to the disposer.
Chargeable Gain
Less: Exemptions available under schedule 4
Total amount of chargeable gain

The disposal date according to the law would be:

On the date of agreement if there is a written agreement; or
On the date of completion of the disposal of the asset if there is no written agreement.

The date of completion of disposal means:

The date the ownership of the asset is transferred by the disposer; or
The date on which the whole of the amount or value of the consideration for the transfer has been received by the disposer.

whichever is earlier

The date of acquisition of the asset by the acquirer shall be deemed to coincide with the date of disposal of that asset by that disposer to that acquirer. The law has provided some exemptions as well too from RPGT.

Frequently Asked Questions

What is RPGT?

Real Property Gain Tax is the tax levied on disposal of property by the disposer in Malaysia.

Who needs to pay RPGT?

Every disposer in Malaysia who made profit from the disposal, needs to pay RPGT. However, there are certain exceptions too outlined by IRBM where tax is not required to be paid.

What is the current RPGT rate?

There are different rates according to the category of the disposer. If the disposal is within 3 years from the acquisition date, the rate is 30% for all. Subsequently there is a change in the rates.

How do I calculate the chargeable gain?

Chargeable Gain= Disposal Price-Acquisition expenses-allowable expenses.

Are there any penalties for late payment?

Yes, there are penalties for late payment of RPGT. There is no flat fees. It is 10% penalty on outstanding taxes to be paid after the 60-day deadline.

How do I pay RPGT?

RPGT can be paid online or offline too. Tax Identification Number (TIN) or Bill number must be there before payment. The payment must be done within 60 days from the disposal date.