Real Property Gains Tax (RPGT)
Updated: Mar 12, 2020
RPGT are referring to a form of Capital Gain Tax which derived from homeowners upon successful disposal of their property in malaysia.
In another words, You have to pay taxes within 60 days of sale based on your profit (gains) if any from selling your property.
For a quick calculation, the formula is:
Chargeable Gain = Disposal Price - Purchased Price - Miscellaneous Costs 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
A house was purchased 12 years ago at RM500,000, and you would like to dispose off the property now. The market price of the house is now at RM700,000.To calculate the chargeable gain we minus the price RM700,000 by the original purchase price RM500,000 and any miscellaneous cost, let's say we incurred a miscellaneous cost of RM10,000 from lawyer fees. The calculation goes as follows:
Chargeable Gain = Disposal Price - Purchased Price - Miscellaneous Costs = RM700,000 - RM500,000 - RM10,000 = RM190,000 Now, we move onto the net chargeable gain. As mentioned above we can deduct the exemption waiver.
Net Chargeable Gain = Chargeable Gain - Exemption Waiver (RM10,000 or 10% of Chargeable Gain, whichever is higher) = RM190,000 - (RM190,000 X 10%) = RM171,000
Tax payable = Net Chargeble Gain X RPGT Rate (based on holding period) = RM171,000 X 5% = RM8,550
You’ll pay the RPTG over the net chargeable gain. If you owned the property for 12 years, so you’ll need to pay RPGT of 5%.
Good news! There are some exemptions allowed for RPGT. Among the exemptions are:
Exemption on gains from the disposal of one private residential property once-in-a-lifetime to an 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.Low cost, low-medium cost and affordable housing priced below RM200,000 will be exempted from RPGT.