If you’re planning to sell a property in Malaysia, Real Property Gains Tax (RPGT) is the number that decides how much of your profit you actually take home. It’s calculated on the gain, not the sale price — but the rate you pay depends heavily on how long you’ve held the property.
How RPGT is calculated
The taxable amount is your chargeable gain: disposal price minus your acquisition price, allowable acquisition costs (like stamp duty and legal fees paid when you bought), and any improvement costs — renovations, extensions — with proper receipts. Every seller also gets an automatic exemption of RM10,000 or 10% of the gain, whichever is higher, applied before the tax rate kicks in.
RPGT rates for Malaysian citizens and PRs
- Year 1–3: 30%
- Year 4: 20%
- Year 5: 15%
- Year 6 onwards: 0%
That last line is the one worth planning around. If you’re close to your 6-year mark and can afford to wait, the difference between selling in Year 5 and Year 6 can be tens of thousands of ringgit on a meaningful gain.
Rates for foreigners and companies
Foreigners and non-permanent-resident individuals pay a flat 30% for disposals within the first 5 years, dropping to 10% from Year 6 onward — there’s no 0% tier for non-citizens. Companies follow the same schedule as citizens through Year 5, but land at 10% from Year 6, never reaching zero.
A worked example
Say you bought a unit for RM500,000 in 2020 and sold it in 2024 (Year 4) for RM700,000. Your gain is RM200,000. After the RM10,000 automatic exemption, the chargeable gain is RM190,000. At the Year 4 rate of 20%, RPGT payable is RM38,000. Had you waited two more years to sell in Year 6, that same gain would be entirely tax-free.
The once-in-a-lifetime private residence exemption
Malaysian citizens and PRs can claim a full RPGT exemption once in a lifetime on the disposal of a private residence — worth checking whether you’ve used this before you assume you’ll owe tax on your own home.
Filing and the retention sum
RPGT now runs on a self-assessment basis: you compute your own gain, apply exemptions, and file within 60 days of disposal via Form CKHT. The buyer is generally required to retain 3% of the disposal price and remit it to LHDN as a safeguard against unpaid tax — this is standard practice and not something to be alarmed by as a seller.
Timing your sale around RPGT
If your gain is meaningful and you’re within a year or two of hitting Year 6, it’s worth running the numbers both ways before you list. Whether you’re selling a condo, terrace, or semi-D, the holding period alone can be worth more than any negotiation on price.