The Star Residences @ Gold Coast
Melbourne Square @ Southbank, Melbourne
Paragon @ Queen St Melbourne
Sierra @ Hawthorn, Melbourne
299 King @ Melbourne CBD
Rosslyn Apartments @ West Melbourne
Brightwood Monash @ Clayton

RPGT, Real Property Gain Tax is a TAX to be charged in respect of chargeable gain accruing on the disposal of any real property fall under this Act. It has been introduced in Malaysia at multi-tier rates since year 1995 up to 2007 & was suspended from 1st April 2007 to 31st December 2009 in a move to shore up the sluggish Malaysia property sector affected by the world financial crisis. In January 1, 2010, RPGT was reinstated at a single rate of 5% for all taxable gains (for all disposal within five years).

Effective January 1, 2014, property owners and investors who dispose off their property in Malaysia within five years will be subject to the revised RPGT rate on taxable capital gains for sale and purchase agreements signed on or after that date. For disposal of property whereby state consent is required, the date of disposal shall be the date when such conditions have been complied with but not the date of SPA.

 

Category of Disposal Rate of Tax
Citizen / PR Non-Citizen Companies
Within 3 years after the date of acquisition 30% 30% 30%
4th year after the date of acquisition 20% 30% 20%
5th year after the date of acquisition 15% 30% 15%
6th year after the date of acquisition 0 5% 5%

 

The holding period of  3, 4, 5 and 6 years refer to the period between the date of the acquisition of the property and the date of disposal of such property.

The following RPGT exemptions which were implemented under the previous regime continue to be available:

  1. RPGT exemption on gains from the disposal of one residential property once in a lifetime to individuals;

  2. RPGT exemption of up to RM 10,000 or 10% of the net gains, (whichever is higher) from the disposal of real property by individuals; and

  3. RPGT exemtion on gains arising from the disposal of real property between family members (e.g. husband and wife, parents and children, and grandparents and grantchildren).

Briefly, the computation of RPGT in Malaysia is as follows:-

A) Disposal Price

Dispose Consideration

- All expenses in enhancing / preserving extension
- All expenses incurred after acquiring the asset in respect
- All incidental expenses relating to disposal (legal fee)
- Advertising cost (looking for buyer)

B) Acquisition Price

Purchase Consideration

- Fees, Commission, cost of professional services
- Cost of Transfer (Stamp Duty)
- Cost of advertising (looking for Seller)
- Compensation for damage
- Receipt of Insurance policy for damages
- Deposits forfeited

Taxable capital gains = Disposal Price – Acquisition Price less RM10,000.00 exemption or 10% of the net gains, whichever is higher for an individual.

In standard practice, A 2% retention sum of the disposal price will be retained by acquirer’s solicitor for RPGT purpose and filing of notification of disposal to Board of Inland Revenue of Malaysia is required within 60 days.