REAL PROPERTY GAIN TAX (RPGT)

The chargeable gains arising from the disposal of any land situated in Malaysia and any interest, option or other right in or over such land or the disposal of shares in a ‘real property company’ is subject to Real Property Gains Tax.

Chargeable Assets

An Act enacted by the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong as the Real Property Gain Tax Act 1976. Interpreted chargeable asset as real property gain tax, shall be charged in accordance to this Real Property Gain Tax Act 1976 in respect of chargeable gain accruing on the disposal of any real property. Subject to this Act, the chargeable gain from disposal of real property shall be charged according to the category Tax Rates in Ringgit Malaysia.

Disposer’s Responsibilities

The disposer of a real property has to submit the following within 30 days from the date of disposal of the asset:

1. Completed Form CKHT 1;

2. Copies of stamped Sale and Purchase Agreement or Form 14A (memorandum of transfer) to prove          the acquisition and disposal of the asset;

3. Copy of grant/title deed (if any);

4. Copies of bills and receipts for expenses claimed. (in case of companies or non-citizen and non-permanent resident individuals, details not required if asset is disposed in the sixth or subsequent year from the date of acquisition).

Acquirer’s Responsibilities

An acquirer has to submit the following within 30 days from the date of disposal of the asset:

1. Completed CKHT 2 forms;

2. Copy of stamped Sale and Purchase Agreement or Form 14A (memorandum of transfer) to prove the acquisition;

3. Copy of grant/title deed (if any).

Acquirer (or his solicitor) is also required to retain the whole of the consideration monies or a sum not exceeding five percent (5%) of the total value of the consideration whichever is the lower, until he receives clearance (Form CKHT 4 or CKHT 5) from the Inland Revenue Board.

Example To Illustrate Calculation Of RPGT Payable

(effective from Jan 1, 2019)

Ms. Lee purchased a property on year 2017 at RM100,000 and sold on 11^st Jan 2019  at RM200,000 (2 years from the date of purchase). She made RM100,000 from the transaction and the gains are subject to 30% RPGT and the calculation will be:-

RM100,000 (Property Gains) – RM10,000 (Waived Exemption) =

RM90,000 (Taxable Gains)

RM90,000 (Taxable Gains) x 30% (RPGT Rate) = RM27,000.

(RPGT Chargeable)

Thus, the RPGT chargeable to Ms. Lee will be RM27,000.