What Is RPGT?
Real Property Gains Tax (RPGT) is a tax imposed on profits made from selling real property in Malaysia. It applies to the net gain (selling price minus purchase price, plus allowable deductions) — not the total selling price.
RPGT was first introduced in 1976, abolished in 2007, and reintroduced in 2010. The current rates were significantly revised in recent years to balance investment activity with fiscal policy.
2025 RPGT Rates
Malaysian Citizens & Permanent Residents
| Holding Period | RPGT Rate |
|---|---|
| Within 1 year | 30% |
| Year 2 | 30% |
| Year 3 | 30% |
| Year 4 | 20% |
| Year 5 | 15% |
| Year 6 and beyond | 0% |
Key takeaway: If you hold a property for 6 or more years, Malaysian citizens and PRs pay zero RPGT.
Foreign Individuals & Companies Not Incorporated in Malaysia
| Holding Period | RPGT Rate |
|---|---|
| Within 5 years | 30% |
| Year 6 and beyond | 10% |
Note: Foreign individuals never reach 0% — the minimum is 10% regardless of holding period.
Companies (Incorporated in Malaysia)
| Holding Period | RPGT Rate |
|---|---|
| Year 1–3 | 30% |
| Year 4 | 20% |
| Year 5 | 15% |
| Year 6 and beyond | 10% |
How RPGT Is Calculated
Chargeable gain = Disposal price − Acquisition price − Allowable expenditure
Allowable expenditure includes:
- Legal fees paid on purchase
- Stamp duty paid
- Renovation or improvement costs (must be documented)
- Agent commission on sale
- Valuation fees
Example:
- Purchase price (2019): RM500,000
- Selling price (2025): RM750,000
- Legal fees + stamp duty (paid on purchase): RM15,000
- Renovation (with receipts): RM30,000
- Agent commission (3%): RM22,500
Chargeable gain = RM750,000 − RM500,000 − RM15,000 − RM30,000 − RM22,500 = RM182,500
Holding period = 6 years → Malaysian citizen: RPGT = 0%
Key Exemptions to Know
1. Once-in-a-Lifetime Private Residence Exemption
Every Malaysian individual (citizen or PR) gets one complete exemption from RPGT for the disposal of a private residence. To qualify:
- The property must be used as your main residence
- You can only use this exemption once in a lifetime
- You cannot have claimed it on a previous disposal
Tip: Save this exemption for your most profitable sale.
2. Properties Held More Than 5 Years (Malaysians)
As shown in the table above, Malaysian citizens and PRs pay 0% RPGT on properties held for 6+ years. This is the most commonly used "exemption" in practice.
3. Transfer Between Family Members
Transfers between husband and wife, parents and children, and grandparents and grandchildren are exempt from RPGT — only RM10 stamp duty applies (Budget 2024 policy).
4. Inheritance
Property acquired through inheritance is not subject to RPGT at the time of inheritance. However, if the inheritor subsequently sells the property, RPGT is calculated from the original acquisition date and cost of the deceased.
Self-Assessment from January 2025
From 1 January 2025, RPGT operates under a self-assessment (STS) system:
- Sellers must file RPGT within 60 days of the disposal date via MyTax (mytax.hasil.gov.my)
- The disposer (seller) AND acquirer (buyer) both have filing obligations
- Late filing penalty: RM200–RM20,000, plus 10% of tax underpaid
Important: Your lawyer will typically handle the RPGT filing as part of the conveyancing process, but you are ultimately responsible. Confirm with your solicitor.
Retention Sum: How RPGT Is Collected
When you sell a property, the buyer retains 3% of the purchase price (for Malaysian citizens) or 7% for foreigners and remits it directly to LHDN (Inland Revenue Board) within 60 days. This retention sum is held until your RPGT assessment is finalised.
If your actual RPGT is less than the retention sum (or zero, for 6-year holders), LHDN will refund the excess — typically within 3–6 months of filing.
Planning Tips to Minimise RPGT
- Hold for 6+ years if you're a Malaysian citizen — the most straightforward approach
- Document all renovation costs carefully — these reduce your chargeable gain
- Use the private residence exemption strategically — don't waste it on a low-gain sale
- Consider timing — if you're approaching year 5, wait for year 6 to avoid the 15% rate
- Sell at a loss offset: If you have other property that sold at a loss in the same year, this cannot offset RPGT gains (RPGT is a separate regime from income tax)
Need Help Calculating Your RPGT?
Before listing your property for sale, run the numbers. Tom Ng can connect you with our conveyancing partners to calculate your exact RPGT exposure and help you time your sale optimally.
