Real Property Gain Tax or what commonly known as RPGT is a form of tax charge on the disposal of property in Malaysia. The Real Property Gain Tax (Act 1976) started since 2009. It is a chargeable gains derived from disposal of property. The RPGT only apply if there are positive net capitals gains.
Real Property Gain Tax (RPGT)
Net Capitals Gains= Disposal price - Miscellaneous charges ( stamp duty, legal fees, advertisement charge, etc)
List of item that can deduct -
Sale and Purchase agreement
Memorandum Of Transfer
Renovation Fee, or Upgrading Cost
Professional Fees (Commission)
Usually people misunderstand these item are deductable (list of Item that unable to deduct)
Loan Agreement Legal Fee
Loan Agreement Stamp Duty
Bank Interest (installment).
For individuals ( not campanies ) there is an additional waiver on the taxable amount.
Chargeable Gain = Disposal Price – Purchased Price
Net Chargeable Gain = Chargeable Gain – Exemption Waiver ( Rm10,000 or 10 % of Chargeable Gain, whichever is higher)
Tax Payable = RPGT rate ( based on holding period)*Net Chargeable Gain
When purchasing a property, purchaser will usually pay 10% of the home value as a deposit. After that as prescribed by law, the purchaser's solicitors are required to retain 3% out of the 10% of the purchase price from the deposit and remit the same to the Inland Revenue Board within sixty (60) days from the date of the sale and purchase agreement to meet the RPGT payable.
Exemption on gains from the disposal of one residential property once in a lifetime to individual ( This exemption is utilize whenever owner wanted to use it) Eligibility of the exemption is subjective to owner is able to prove the property is for own use or renting purposes. Failing to prove will result in RPGT exemption withdraw.
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)