Real Property Gain Tax (RPGT)
REAL PROPERTY GAIN TAX (RPGT)
With effective from 1 January 2014
In the Budget 2014, the government RPGT for Malaysian, properties under personel name is 30% on all properties sold before three (3) years from the date of purchase, 20% for properties sold on the fourth (4) year and 15% on the fifth (5) year. There will be no tax on property disposed after the fifth (5) year. For foreigners who dispose of their properties within the first 5 years from the date of purchase, the RPGT will be 30%. After the fifth (5) year the RPGT will be 5%
Basis Of Taxation
The chargeable gains arising from the disposal of any land situated in Malaysia and any interest, option or other right in or over such land or the disposal of shares in a ‘real property company’ is subject to Real Property Gains Tax.
An Act enacted by the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong as the Real Property Gain Tax Act 1976. Interpreted chargeable asset as real property gain tax, shall be charged in accordance to this Real Property Gain Tax Act 1976 in respect of chargeable gain accruing on the disposal of any real property. Subject to this Act, the chargeable gain from disposal of real property shall be charged according to the category Tax Rates in Ringgit Malaysia.
The disposer of a real property has to submit the following within 30 days from the date of disposal of the asset:
1. Completed Form CKHT 1;
2. Copies of stamped Sale and Purchase Agreement or Form 14A (memorandum of transfer) to prove the acquisition and disposal of the asset;
3. Copy of grant/title deed (if any);
4. Copies of bills and receipts for expenses claimed. (in case of companies or non-citizen and non-permanent resident individuals, details not required if asset is disposed in the sixth or subsequent year from the date of acquisition).
An acquirer has to submit the following within 30 days from the date of disposal of the asset:
1. Completed CKHT 2 forms;
2. Copy of stamped Sale and Purchase Agreement or Form 14A (memorandum of transfer) to prove the acquisition;
3. Copy of grant/title deed (if any).
Acquirer (or his solicitor) is also required to retain the whole of the consideration monies or a sum not exceeding five percent (5%) of the total value of the consideration whichever is the lower, until he receives clearance (Form CKHT 4 or CKHT 5) from the Inland Revenue Board.
Example To Illustrate Calculation Of RPGT Payable
(effective from Jan 1, 2013)
Ms. Lee purchased a property on year 2010 at RM100,000 and sold on 1st Jan 2013 at RM200,000 (3 years from the date of purchase). She made RM100,000 from the transaction and the gains are subject to 10% RPGT and the calculation will be:-
RM100,000 (Property Gains) – RM10,000 (Waived Exemption) =
RM90,000 (Taxable Gains)
RM90,000 (Taxable Gains) x 10% (RPGT Rate) = RM9,000.
Thus, the RPGT chargeable to Ms. Lee will be RM9,000.
Allowable loss means a loss made after the disposal. Tax relief shall be allowed in respect of the following accrued:
1. If the disposal price is less than the acquisition price.
2. If the disposal price is equal to the acquisition price.
(under Real Property Gains Tax (Exemption) Order 2009)
However, there are three circumstances where the property owner is exempted from the RPGT.
*The level of exemption is increased from RM5,000 to RM10,000 or 10% of the chargeable gains, whichever is the higher.
*Gifts between parent and child, husband and wife, grandparent and grandchild; and
*Disposal of a residential property once in a lifetime.