Latest Real Property Gains Tax (RPGT) in Malaysia 2020

Posted on April 6, 2020 by Lok Cha Jung

What is RPGT? RPGT stands for Real Property Gains Tax. It is a payable tax when you make money from selling your property. RPGT Payable = (selling price - buying price) x RPGT Rate Latest Real Property Gains Tax (RPGT) in Malaysia 2020

	Malaysian	Company	Foreigner
1st Year	30%	30%	30%
2nd Year	30%	30%	30%
3rd Year	30%	30%	30%
4th Year	20%	20%	20%
5th Year	15%	15%	15%
Thereafter	5%	10%	10%

5% Hike Since 2019

Is Malaysian entitled for RPGT exemption?
Yes for Malaysian, it is a once in a lifetime provided that you have not applied before and you have not sell any property before. Bear in mind that this exemption is only limited to residential property disposal.

How to know which year is the year of your disposal of property?
The year of disposal is based on the date on the Sale and Purchase Agreement. For individual seller, if your sale and purchase agreement is dated on 1 January 2017, then the date on the new Slae and Purchase Agreement is dated 31 March 2020 when you disposed your property, then the year of disposal will be considered as Fourth year and RPGT rate will be 20%.

Do we need to retain a sum of money to be submitted to LHDN during the execution of the Sale and Purchase Agreement?
Yes, if the disposal of the property is taxable. Based on CKHT 502, kindly find the percentage that we need to follow when we submit RPGT：-

Malaysian / Local Company	Non Malaysian
3%	7%

How to calculate RPGT?
Scenario Number 1:
Thomas had purchased a property worth RM500,000 on 31 October 2017, thereafter he sold the said property at RM700,000 on 31 March 2020. It is worth to be noted that he could have signed the SPA earlier but because of the flood, he had no choice but to wait, that is why the previous old Sale and Purchase Agreement was dated 16 November 2017. Coincidentally, this time around, Thomas was supposed to sign the Sale and Purchase Agreement on 31 March 2020 to dispose the property, but unfortunately, due to the Covid-19 and Movement Restriction Control Order, he was forced to wait and only managed to sign on 14 April 2020. During the period of residence, he has spent RM15,000 for renovation purpose. Besides, resulting from this disposal, he has spent RM12,000 to estate agent as commission and RM8,000 to law firm as solicitor fee. How much RPGT Thomas has to pay?

1. Which year is the year of disposal for Thomas?

Year of disposal = date on New SPA - date on old SPA
14 April 2020 - 16 November 2017 = 3rd Year

2. How much RPGT Thomas has to pay?

RGPT rate for 3rd Year = 30%
RPGT Payable = (selling price - buying price) x RPGT Rate
= (RM700,000 - RM500,000) x 30%
= RM200,000 x 30%
= RM60,000

5. Is there a way for Thomas to reduce the amount of payable RPGT?

Thomas can submit receipts for the payment he has made in respect of the disposal of the said property such as estate agent commission, solicitor fee and renovation cost to reduce the payable RPGT.

Solicitor Fee ：RM8,000
Renovation Fee ：RM12,000
Commission ：RM15,000
Payable RPGT ： RM60,000 - RM8,000 - RM12,000 - RM15,000 = RM25,000

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