2025 Malaysia RPGT Guide: Updated Tax Rates, Exemptions & Calculation Method
When selling a property in Malaysia, understanding the Real Property Gains Tax (RPGT) is essential. Whether you’re a Malaysian citizen, permanent resident, foreign investor, or company, knowing how this tax works can help you maximize your gains and avoid costly mistakes. This guide provides an updated breakdown of RPGT in 2025, including who needs to pay, how to calculate it, exemptions available, and how to make payment.
What is RPGT?
Real Property Gains Tax (RPGT) is a tax imposed by the Malaysian government on the profit gained from selling real estate.
- If you sell your property at a loss (i.e., for less than the purchase price plus related costs), no RPGT is payable.
- The longer you hold your property, the lower your RPGT rate.
Who Needs to Pay RPGT?
RPGT applies to the following individuals and entities:
- Malaysian citizens
- Permanent residents (PR)
- Foreigners
- Companies or business entities
- Anyone selling shares of a Real Property Company (RPC) — if 75% or more of its assets consist of real estate
RPGT Tax Rates (2025):
| Holding Years | Local and Permanent Resident | Non-Citizens & Foreigner | Company |
|---|---|---|---|
| 1 | 30% | 30% | 30% |
| 2 | 30% | 30% | 30% |
| 3 | 30% | 30% | 30% |
| 4 | 20% | 30% | 20% |
| 5 | 15% | 30% | 15% |
| 6 and above | 0% | 10% | 10% |
How to Calculate?
Formula:
- Taxable Gain = Selling Price – (Purchase Price + Related Costs)
- Net Taxable Gain = Taxable Gain – Exemption (RM10,000 or 10%, whichever is higher)
- Payable RPGT = Net Taxable Gain × RPGT Rate (based on holding period)
Example:
Purchase Price: RM450,000
Selling Price: RM640,000
Related Costs: RM8,000
Holding Period: 5 years → 15% RPGT rate
Step-by-step Calculation:
- Taxable Gain:
RM640,000 – (RM450,000 + RM8,000) = RM182,000 - Exemption (10% or RM10,000, whichever is higher):
10% of RM182,000 = RM18,200
(Since RM18,200 > RM10,000, use RM18,200) - Net Taxable Gain:
RM182,000 – RM18,200 = RM163,800 - RPGT Payable:
RM163,800 × 15% = RM24,570
- Taxable Gain:
RPGT Exemptions in 2025 (Malaysian ONLY!)
The Malaysian government provides several RPGT exemptions to reduce the tax burden for property owners:
1) One-Time Private Residential Exemption
- Malaysian citizens or PRs can apply for RPGT exemption once in their lifetime for a residential home.
- A written application is required to claim this exemption.
2) Per Transaction Exemption
- For every transaction, RM10,000 or 10% of taxable gain (whichever is higher) is exempted automatically.
- This applies to each and every sale.
3) Family Transfers & Special Circumstances
Transfers that qualify for exemption:
- Between spouses
- Between parents and children
- Between grandparents and grandchildren
(Donor must be a Malaysian citizen)
Other Exemptions:
- Gifts to the government or registered charities
- Property transferred by inheritance
- Property acquisition through compulsory acquisition
- Company-to-company transfers (if shareholding ≥ 75%)
How to Pay RPGT
RPGT payment involves both seller and buyer, and must be completed within 60 days after the property sale.
Step-by-Step Process:
- Document Preparation
- Seller fills out RPGT Form 1A
- Attach Sale and Purchase Agreement (SPA) and proof of deductible costs
- Apply for Exemptions (if eligible)
- Submit RPGT Form 3 under Section 27A of the RPGT Act
- Buyer’s Cooperation
- Buyer must complete RPGT Form 4 (Tax Clearance) and provide a copy of the SPA
- Submission & Payment
- Submit all forms and documents to your nearest LHDN (Inland Revenue Board) office
- Make payment within 60 days of the transaction date
Final Thoughts
- The longer you hold your property, the lower your RPGT rate.
- Always calculate your tax liability before selling to avoid unexpected costs.
- Be aware of the available exemptions—you could save thousands.
Need help understanding your RPGT or planning your property sale?
Contact Ivy Lim today for professional advice and peace of mind.
