What is RPGT?
Real Property Gains Tax (RPGT), or Cukai Keuntungan Harta Tanah, is a tax on the profit you make when you sell property in Malaysia. It is governed by the Real Property Gains Tax Act 1976 and collected by the Inland Revenue Board (LHDN). It applies to houses, condos, shops, factories and land, and also to shares in companies that mainly own property.
RPGT is only charged when there is a gain. If you sell at a loss, there is no RPGT, but you still need to submit the forms.
RPGT rates
The rate depends on who is selling and how long the property was held, counted from the purchase SPA date to the sale SPA date.
| Disposal | Citizen / PR | Malaysian company | Foreigner |
|---|---|---|---|
| Within 3 years | 30% | 30% | 30% |
| 4th year | 20% | 20% | 30% |
| 5th year | 15% | 15% | 30% |
| 6th year onwards | 0% | 10% | 10% |
In short: Malaysian citizens and permanent residents who hold for more than five years pay no RPGT. Companies and foreigners continue to pay 10% after year five.
How to calculate RPGT
- Net disposal price = selling price − selling costs (agent commission, legal fees, advertising).
- Acquisition cost = purchase price + purchase costs (legal fees, stamp duty, valuation) + costs that add value, such as renovation or extensions (keep your receipts).
- Net gain = net disposal price − acquisition cost.
- Chargeable gain = net gain − exemption (individuals only).
- RPGT = chargeable gain × RPGT rate.
Example: Malaysian citizen selling in the 4th year
Bought for RM 500,000 + RM 15,000 costs = RM 515,000
Sold for RM 650,000 − RM 20,000 costs = RM 630,000
Net gain: RM 115,000
Exemption (10% of gain, higher than RM10,000): − RM 11,500
Chargeable gain: RM 103,500
RPGT at 20%: RM 20,700
Try your own numbers with the RPGT Calculator.
Common exemptions
- RM10,000 or 10% of the gain, whichever is higher, for every individual seller (per disposal).
- Once-in-a-lifetime private residence exemption for Malaysian citizens and PRs selling their own home. You can only use it once, so it is often better to save it for a large gain.
- Transfers between family members — between husband and wife, parent and child, or grandparent and grandchild — by way of love and affection are treated as no gain, no loss (for citizens).
- Properties compulsorily acquired by the government, and transfers under a will or inheritance.
Your lawyer will confirm which exemptions apply and claim them in the RPGT forms.
Retention sum and RPGT forms
When you sell, the buyer must hold back part of the price and pay it to LHDN within 60 days of the sale date:
| Seller | Retention sum |
|---|---|
| Malaysian citizen / PR / company | 3% of the selling price |
| Foreigner | 7% of the selling price |
Both the seller and the buyer must submit RPGT forms to LHDN within 60 days of the disposal date, even if no tax is payable. This is normally handled by the lawyers. If the retention sum is more than your actual RPGT, you can apply for a refund of the balance.
When is the "date of disposal"?
It is generally the date the Sale and Purchase Agreement (SPA) is signed, not the date the keys are handed over. The same applies to your purchase date — so check the SPA dates when working out the holding period.
Tips for sellers
- Keep receipts for renovation and improvements — they reduce your gain.
- If you are close to the 6th year, waiting a few months can save a lot of tax (citizens and PRs).
- Agree on the selling price with the retention sum in mind, as you will only receive 97% (or 93%) at first.
Planning to sell in Johor Bahru? Tell me about your property for a free market price discussion.