Property and divorce lawyer Johor Bahru

Real Property Gain Tax, or RPGT, or Cukai Keuntungan Harta Tanah, is a tax levied by the LHDN on the capital gains of its citizens.

The act was first introduced in 1976 under Real Property Gains Tax Act 1976 as a way for the government to limit property speculation and prevent a potential bubble or speculation occurs when investors ‘speculate’ to earn huge profits by buying low, and selling high – making a large return on their investment

Beyond this, RPGT Malaysia is a significant source of revenue for the government, with the earnings used for national development. As such, rates fluctuate depending on the economic needs of the country.


Who need to pay?

RPGT is chargeable on seller who disposed a real property.


How much I need to pay?

The RPGT is chargeable on the profit between your buying and selling price stated on your previous and current Sale and Purchase Agreement.


what is the applicable tax rate?

1. Individuals (Malaysian Citizens)

30% on the profit in the first year of disposal
30% on the profit in the second year of disposal
30% on the profit in the third year of disposal
20% on the profit in the fourth year of disposal
15% on the profit in the fifth year of disposal
0% out of sale in the sixth year of disposal or more


2. Individuals (non-citizens and foreigners)

30% on the profit in the first year of disposal
30% on the profit in the second year of disposal
30% on the profit in the third year of disposal
30% on the profit in the fourth year of disposal
30% on the profit in the fifth year of disposal
10% on the profit in the sixth year of disposal or more


3. Company

30% on the profit in the first year of disposal
30% on the profit in the second year of disposal
30% on the profit in the third year of disposal
30% on the profit in the fourth year of disposal
30% on the profit in the fifth year of disposal
10% on the profit in the sixth year of disposal or more

  • Exemption on gains when a property is transferred within the family, either between husband and wife, parent and child, or grandparent and grandchild. Transfer between siblings is excluded. 
  • Exemption on gains when a property is acquired from death the deceased by probate or letters of administration.
  •  RPGT payable if the disposal of the property is made by the beneficiaries within 5 years from the date of death of the deceased

When to submit?

  • The seller need to file tax return in form CKHT 1A within 60 days of date of signing of Sale and Purchase Agreement by reporting the profit they earn.
  • Form CKHT 3 shall be filed if there is no profit
  • The sellers have the right to apply an exemption (once in a lifetime) or tax relief by submitting receipts on renovation fees, lawyer’s fees, brokerage fees for a tax deduction
  • In the event there is profit, the purchaser lawyer has the right to retain 3% of the purchase price (foreigner 7%) as a retention sum to Inland Revenue by filing CKHT 502 for a assessment of tax.
  • Any excess will be refunded to seller but need to top up if there is any shortfall.
  • The seller may opt to file the necessary forms with the Inland Revenue Board individually or seek assistance from the solicitors at a fee prescribed by the Solicitors Remuneration Order 2006.

What is the consequences of late payment?

Any payment or submission of documents after 60 days may attract a penalty payable by the seller. The penalty is additional 10% of the amount payable as RPGT. In worst case, the seller may also face the problem of travel restrictions.

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