With Malaysia’s tax system continuously evolving, property-related taxation has become a critical topic for homeowners, investors, and businesses. Understanding the differences between Real Property Gains Tax (RPGT) and the Capital Gains Tax (CGT), which takes effect in 2024, is essential for accurately assessing the tax impact on property transactions. This guide explains RPGT’s concept, scope, calculation, exemptions, and tax responsibilities to help taxpayers navigate the latest regulations.
RPGT is a tax imposed by the Malaysian government on the capital gains derived from the disposal of real property.
- Capital gain arises when the resale price of a property exceeds the original purchase price.
- If a property is sold at a loss or without profit, RPGT is not payable.
Before 1 March 2024:
- Covers all types of real property (residential, commercial, land, etc.)
- Includes Real Property Company (RPC) share disposals
From 1 March 2024 onward (New Regulation):
- RPGT only applies to real property (houses, commercial units, industrial land, land plots)
RPC share disposals are no longer subject to RPGT
From 1 January 2024, Malaysia officially implements Capital Gains Tax (CGT).
Disposals of RPC shares will now be subject to CGT and no longer governed by the 1976 RPGT Act.
RPGT may apply to the following when selling real property:
- Malaysian citizens
- Permanent residents (PR)
- Foreigners
- Malaysian-registered companies
- Foreign companies
Any property disposal (excluding shares) may trigger RPGT liability.
- Total gain (difference) = Selling price – Purchase price
- Net gain = Total gain – Deductible expenses (e.g., legal fees, agent fees, renovation costs, miscellaneous expenses)
- RPGT payable = Net gain × Applicable RPGT rate
- RM10,000 or 10% of taxable gain (whichever is higher) is automatically exempt
- Private residence exemption: One-time lifetime exemption for Malaysian citizens or PR
- Must file RPGT within 60 days after the property disposal
- From 2025 onward: payment due within 90 days from the date of disposal
Property transactions are subject to evolving tax obligations. Understanding the scope and calculation of RPGT and CGT is crucial for homeowners, investors, and businesses. Proper compliance helps avoid unnecessary tax liabilities and penalties. For specific transaction procedures, exemption eligibility, or tax rate application, consulting a professional tax advisor is recommended to ensure full compliance with the latest regulations.
**Data updated on 25.11.2025
(201706002678 & AF 002133)