REAL PROPERTY GAIN TAX IN MALAYSIA
EXEMPTIONS FROM REAL PROPERTY GAIN TAX
Provisions for exemption from Real Property Gains Tax are found in the various schedules of the RPGT Act 1976.
There are some exemption allowed for RPGT. There are:-
1. Gains from the disposal of one private residential property once-in-a-lifetime to an individual. 2. Disposal price is deemed to be the same as the acquisition price, thereby resulting in no gain made. 3. Gains arising from the disposal of real property between family members
E.g : husband and wife; parents and children; grandparents and grandchildren.
4. 10% of profit OR RM 10,000 per transaction is not taxable 5. Low cost, low medium-cost and affordable housing priced below RM 200,000
REAL PROPERTY GAIN TAX (RPGT) (W.E.F 1 January 2014)
Real property gains tax (RPGT) is a tax charged on gains arising from the disposal or sale of real property or shares in a real property company (RPC). In simple terms, real property includes land or immovable property, with or without a title.
If you sell your house with a loss you don’t have to pay any RPGT because you didn’t make any profit. If you made a profit you need to make sure you pay the RPGT within 60 days of the sale. You can pay the RPGT by paying a fee for the solicitors of the sale. Paying yourself is also possible if you prefer that instead of dealing with a lawyer you can fill in the necessary forms for the Inland Revenue Board.
Effective Jan 1, 2019, the RPGT has been increased for the disposal of a property from the sixth year onwards. The table is a summary of the RPGT rates applicable to various entities.
REAL PROPERTY GAIN TAX (RPGT) RATES CLASSIFICATION FROM (1.1.2019)
The acquirer (buyer) is required to remit an amount equivalent to 3% of the purchase price within 60 days of the date of disposal.
In this regard, the buyer’s solicitor usually retains 3% of the selling price from the deposit and pays it to the Inland Revenue Board no later than 60 days from the date of disposal but, often much earlier, as the seller will require the payment receipt to file his own returns.
The Inland Revenue Board will refund any excess paid or require the disposer to pay any shortfall. The remittance of 3% need not be made if the disposal is not liable to RPGT.
**Please note though that the FAQs do not constitute legal advice and as the situation remains fluid, the legal position may change in the near future.