Real
Property Gains Tax (RPGT) In Malaysia
Real
Property Gains Tax (RPGT) is a form of Capital Gains Tax that is imposed on the
disposal of property in Malaysia
Based
on the Real Property Gain Tax Act 1976, RPGT is a tax on chargeable gains
derived from disposal of property.
A
chargeable gain is the profit when the disposal price is more than purchase
price of the property. What
most people don’t know is that RPGT is also applicable in the procurement and
disposal of shares in companies where 75% of their tangible assets are in
properties, a.k.a. Real Property Companies (RPC). RPGT applies to both
residents and non-residents.
You
will be only be taxed on the positive
net capital gains which is disposal price less the purchased price less
the miscellaneous charges such as;( stamp duty, legal fees, advertisement
charges ,etc).
The holding period is from
the date on the S&P agreement till to the disposal date.
Net
Chargeable Gain = Chargeable gain - Exemption Waiver
Additionally, a waiver on the taxable amount is granted to individuals (but not companies).
Tax
payable = RPGT rate (based on holding period)* Net Chargeable Gain
RPGT
Exemptions
There are exemptions allowed for RPGT. Among the exemptions are:
1) Exemption on gains from the disposal of one residential property
once in a lifetime to individual
(Please utilize this once in lifetime opportunity wisely!)
2)
Exemption on gains arising from the disposal of real property between family members (e.g. husband and wife,
parents and children and grandparents and grandchildren)
3)
10% of profits OR RM10,000 per transaction (whichever is higher) is not
taxable.
Budget 2014
Accordance
with the Budget 2014 announcement, the rates for RPGT has been increased.
Government’s reason for the hike is mainly to reduce speculative activities on
housing prices and real estates.
The following is the RPGT rates effective from 1st
January 2014 for Individual Citizen
1st Year 30%
2nd Year 30%
3rd Year 30%
4th Year 20%
5th Year 15%
6th Year & Above 0%
The following is the RPGT rates effective from 1st January 2014 for Non-citizen
1st Year 30%
2nd Year 30%
3rd Year 30%
4th Year 30%
5th Year 30%
6th Year & Above 0%
The following is the RPGT rates effective from 1st January 2014 for Companies
1st Year 30%
2nd Year 30%
3rd Year 30%
4th Year 20%
5th Year 15%
6th Year & Above 5%
