48 SMART: Real Property Gain Tax (RPGT)
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Friday, 11 October 2013

Real Property Gain Tax (RPGT)

Capital gains are generally not subject to income tax in Malaysia. However, Real Property Gains Tax (RPGT) is charged on chargeable gains arising from the disposal/selling of real property situated in Malaysia or of interest, options or other rights in or over such land as well as the disposal of shares in real property companies.

















RPGT has been introduced in Malaysia at multi-tier rates from Year 1995 to Year 2007. It was suspended from 1st April 2007 to 31st December 2009 in a move to shore up the sluggish Malaysia property sector affected by the world financial crisis. The exemption of RPGT during this period had stimulated the property price in Malaysia.


Real Property Gain Tax (RPGT)
Period
27/10/1995 -
31/03/2007
01/04/2007 -
31/12/2009
01/01/2010 -
31/12/2011
01/01/2012
01/01/2013
1st year
30%
0%
5%
10%
15%
2nd year
30%
0%
5%
10%
15%
3rd year
20%
0%
5%
5%
10%
4th year
15%
0%
5%
5%
10%
5th year
5%
0%
5%
5%
10%
Thereafter
0%
0%
0%
0%
0%

From 1st January 2010 to 31st December 2011, RPGT was reinstated at a single rate of 5% for all taxable gains (for all disposal within five years). For Year 2012, the RPGT rate was 10% for properties disposed within 2 years. For Year 2013, the RPGT rates were increased another 5% for properties disposed within 5 years, hoping that this would slow down the overheat property market.

In order to curb speculation, there might be another increase for RPGT in Budget 2014. The tax rate is expected to increase to 30% from 15% for properties sold within two years and 15% from 10% for properties sold within three to four years. The 10% rate would remain unchanged for properties sold in the fifth year and 0% for properties sold in the sixth year onwards.

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