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What is Malaysia's Real Property Gains Tax (RPGT)?

According to the Real Property Gains Tax Act of 1976, Malaysia's Inland Revenue levies RPGT as a type of capital gains tax (LHDN). If you sell your land or other real estate for more money than you paid for it, you will be responsible for paying this tax.

RPGT is often divided into three tiers:

-Individuals (Citizens & Permanent Residents)

-Individuals (foreigners/non-citizens)

-Companies

RPGT was initially implemented with the primary goal of reducing speculative activity in the neighbourhood real estate market. Its role as a tax law that generates revenue was secondary.

What does RPGT cost in Malaysia?

Since the initial implementation of RPGT in 1995, quite a few adjustments have been made. The most recent RPGT modification, which was announced during Budget 2022 and put into effect in January 2022, exempts Malaysians and permanent residents from paying a 5 percent RPGT when they sell their home in the sixth and subsequent years of ownership. Companies and foreigners, on the other hand, will continue to pay RPGT for company rates of 10%.

Prior to this change, Malaysians and permanent residents who sell their homes after five years must pay a 5 percent RPGT on the proceeds of the sale. Rates Individual Foreigners Companies Disposal in 1 year 30% 30% 30%

Disposal in 2 year 30% 30% 30%

Disposal in 3 year 30% 30% 30%

Disposal in 4 year 20% 30% 20%

Disposal in 5 year 15% 30% 15%