When individuals or companies dispose of real property in Malaysia, the profit from the sale may be subject to Real Property Gains Tax (RPGT). This tax is governed by the Real Property Gains Tax Act 1976 and applies to gains arising from the disposal of property or shares in a real property company.
The HASiL Navigasi 2026 guide provides an overview of RPGT and highlights the responsibilities of taxpayers involved in property transactions. Therefore, it is important for property owners and investors to understand how this tax works.
1. What Is Real Property Gains Tax?
To begin with, Real Property Gains Tax is a tax imposed on profits arising from the disposal of real property located in Malaysia.
In general, the tax applies to gains made when a person sells or transfers:
- Land
- Buildings
- Real estate property
- Shares in a Real Property Company (RPC)
Importantly, the tax applies to both Malaysian residents and non-residents who dispose of chargeable assets located in Malaysia.
2. What Is Considered a Chargeable Asset?
Next, it is important to understand what constitutes a chargeable asset under the RPGT rules.
Typically, chargeable assets include:
- Real property situated in Malaysia
- Shares in a Real Property Company (RPC)
A Real Property Company is generally a company where the value of real property or shares in other RPCs represents at least 75% of the company’s total tangible assets.
Therefore, the disposal of shares in such companies may also trigger RPGT.
3. Determining Chargeable Gains
In order to calculate RPGT, the taxpayer must determine the chargeable gain from the property disposal.
This is generally calculated as follows:
Chargeable Gain = Disposal Price – Acquisition Price – Allowable Expenses
Firstly, the disposal price refers to the consideration received for the property.
Secondly, the acquisition price refers to the cost incurred when acquiring the property, including incidental costs such as legal fees and professional fees.
Finally, allowable expenses may include costs incurred to preserve the value of the property or costs associated with the disposal.
4. Determining the Disposal and Acquisition Date
Furthermore, identifying the correct disposal date and acquisition date is important because it determines the applicable RPGT rate.
In most cases:
- The disposal date is the date of the sale agreement; or
- If there is no written agreement, the date the ownership transfer is completed.
Similarly, the acquisition date of the buyer generally coincides with the disposal date of the seller.
5. RPGT Exemptions and Special Situations
In addition, certain transactions may qualify for exemptions or special treatment.
For example, RPGT may not apply in situations such as:
- Transfer of assets between husband and wife
- Transfer of assets due to inheritance or estate distribution
- Transfer of assets as a gift to the Government or approved charity
- Compulsory acquisition of property
In these cases, the disposal price may be deemed equal to the acquisition price, meaning no chargeable gain arises.
Furthermore, individuals may enjoy an exemption of RM10,000 or 10% of the chargeable gain (whichever is higher) on the disposal of property.
6. RPGT Filing and Self-Assessment
Starting from 1 January 2025, Malaysia introduced the Self-Assessment System for RPGT.
Under this system:
- The disposer must determine the taxable gain.
- The RPGT return must be submitted to LHDN.
- The tax payable must be calculated and paid within the prescribed timeline.
Notably, the RPGT return submitted will be treated as the official tax assessment notice.
7. Penalties for Non-Compliance
Finally, taxpayers should be aware that failure to comply with RPGT obligations may result in penalties.
For instance, if the tax payable is not settled on time, a penalty of 10% of the unpaid amount may be imposed.
Therefore, property sellers should ensure that all RPGT forms are submitted correctly and payments are made within the required timeframe.
Key Takeaways
| Topic | Explanation |
|---|---|
| RPGT | Tax imposed on gains from disposal of property |
| Chargeable assets | Real property and shares in Real Property Companies |
| Tax calculation | Disposal price minus acquisition price and allowable expenses |
| Self-assessment | Introduced from 2025 |
| Exemptions | Certain transfers such as inheritance or spouse transfers |
| Penalties | Late payment may result in additional tax penalties |
Final Thoughts
In summary, Real Property Gains Tax is an important tax consideration when disposing of property in Malaysia. Since the tax applies to both individuals and companies, property investors should carefully evaluate their potential tax exposure before completing a transaction.
Moreover, with the introduction of the RPGT self-assessment system, taxpayers must take greater responsibility for calculating and reporting their tax obligations accurately.
Therefore, proper tax planning and professional advice can help property owners manage their tax exposure and ensure full compliance with LHDN requirements.
Disclaimer: This article is for informational purposes only and does not constitute tax or compliance advice. Organisations should consult their tax advisors or refer to IRAS guidance for tailored instructions.
Source: https://www.hasil.gov.my/media/3bvlkbww/navigasi-hasil-2026.pdf
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