Real Property Gains Tax Malaysia (RPGT): A Complete Overview

In Malaysia, Real Property Gains Taxes (RPGT) means the taxes levied on disposal of chargeable assets such as houses, commercial buildings, vacant lands, farms, etc. Irrespective of the residential status of Malaysia, the same is taxable on the gains accrued on the disposal of chargeable assets situated in the Malaysia. In this article, we would be giving a brief overview of the same.

Key Takeaways

• RGPT rates vary: 30% for disposals within the first three years, gradually reducing to 0% for Malaysians after six years, while foreigners remain taxed at 10%.
• Tax is calculated as the chargeable gain: disposal price minus acquisition cost, allowable expenses, and exemptions.
• Exemptions include RM10,000 (or 10% of gain) per disposal, once-in-a-lifetime residence exemption for citizens/PRs, family transfers, six-year rule, small property disposals, and special cases like gifts to government or inheritance.
• RGPT filing requires both disposer and acquirer to submit CKHT forms within 60 days of disposal, either online via MyTax or manually at IRBM offices.
• Late payment attracts a 10% penalty, and payments can be made online (MyTax/e-PCB) or offline at banks or POS Malaysia.

What is Real Property Gains Tax (RPGT)?

Real Property Gains Taxes or RPGT is a tax imposed on profits from the disposal of real property or shares in real property companies in Malaysia. It applies to locals, companies, and foreigners, with rates determined by ownership duration and residency status.

The real property means assets such as houses, commercial buildings, vacant lands, farms, etc. The tax is imposed on disposers or sellers in the year of assessment when the sale takes place.

In common parlance, disposal is on transfer of ownership from one person to another whether by way of sale, conveyance, assignment, settlement, alienation, etc. The tax is administered by the Inland Revenue Board of Malaysia (IRBM) under the Real Property Gains Tax Act, 1976. 

Tax Rates in RPGT Malaysia

The tax rates differ according to the category of the disposer and their holding power. As per Schedule 5 of RPGT Act, the disposer is divided into three categories.

Part 1: It includes individual Malaysian citizens and partners.

Part 2: Disposer is a Company incorporated in Malaysia, or a trustee, trust, or body of persons registered under the law in Malaysia.

Part 3: It comprises of foreign nationals. The disposer is not a citizen, and not a permanent resident, or an executor of the estate of a deceased person who is not a citizen and not permanent resident or a foreign company.

Filing and Payment of Real Property Gains Tax in Malaysia

The Real Property Gains Tax form must be filed by both the acquirer and the disposer. The filing process is as follows:

• The disposer must fill in the form CKHT-1A whereas the acquirer has to fill in Form CKHT 2A. To claim tax exemption, Form CHKT-3 has to be filled.
• Further, these forms can be filed either manually or online. These forms should be filled within 60 days of disposal.
• To fill in the same manually, the form must be downloaded, printed and after the details are filed, the same has to be submitted to IRBM Office or the nearest Hasil office. 
• To fill in the same online, one can fill in the same by logging to website- https://mytax.hasil.gov.my/
• While filing online, documents should be prepared for review. Post its submission, the forms can be printed or saved.  It can be reverified through e-CHKT via IRBM website by entering identification number and password.

RPGT can be paid either online or through an offline mode. There are two ways in online either through MyTax Portal or e-PCB. If a disposer wants to pay in an offline mode, he can pay either through bank counters or POS Malaysia counters.

How to Calculate RPGT Malaysia

RPGT must be paid only if the disposal price is more than the acquisition price. However, there are certain other expenses too and other factors to be considered. 

Formula Representation:

Chargeable Gain  = Disposal Price – (Acquisition Price + Allowable Expenses + Incidental Costs – Insurance/Compensation/Deposits)

Tax Payable = Chargeable Gain – Exemptions (Schedule 4) × Applicable RPGT Rate (based on holding period & disposer category)

Example:

• Disposal Price: RM600,000
• Acquisition Price: RM400,000
• Allowable & Incidental Expenses: RM50,000
• Exemption (Schedule 4): RM10,000

Chargeable Gain = 600,000 – (400,000 + 50,000) = RM150,000

Less Exemption = RM150,000 – 10,000 = RM140,000

If disposed in 4th year (Malaysian individual, rate 20%):

Tax Payable = RM140,000 × 20% = RM28,000 

The disposal date according to the law would be:

• On the date of agreement if there is a written agreement; or
• On the date of completion of the disposal of the asset if there is no written agreement. 

The date of completion of disposal means:

• The date the ownership of the asset is transferred by the disposer; or
• The date on which the whole of the amount or value of the consideration for the transfer has been received by the disposer. 

Whichever is earlier

The date of acquisition of the asset by the acquirer shall be deemed to coincide with the date of disposal of that asset by that disposer to that acquirer. The law has provided some exemptions as well too from RPGT.

RPGT Exemptions in Malaysia (2025)

RPGT (Real Property Gains Tax) provides several exemptions that help reduce or even eliminate tax on property disposals. These exemptions are especially useful for individuals, families, and long-term property holders.

• Individual Exemption: Every individual gets RM10,000 or 10% of the gain (whichever is higher) per disposal. Applies to both full and partial sales.
• Once-in-a-Lifetime Residence Exemption: Malaysian citizens/PRs can exempt one private home disposal in their lifetime (with CKHT 1A Lampiran 3 + proof docs).
• Family Transfers: Tax-free transfers between spouses, parents–children, and grandparents–grandchildren (transferor must be a Malaysian citizen).
• Six-Year Rule: Citizens/PRs are fully exempt if the property is held for 6+ years. Foreigners still taxed 10% after six years.
• Small Property Exemption: Full exemption if property value is ≤ RM200,000 and sold in the 6th year or later.
• Special Exemptions: No RPGT for gifts to government, approved charities, compulsory acquisitions, and approved corporate restructurings (e.g., REITs).
• Estate & Divorce Transfers: Assets passed on after death or transferred via court order in divorce cases (if Malaysian citizen) are exempt.
• Company Share Disposal: Since 2024, company share disposals fall under CGT. RPGT mainly applies to individuals and property assets.