Real Property Gain Tax (RPGT) in Malaysia

With effect from 1 January 2010, RPGT of 5% flat will be applicable on gains on disposal of real properties in Malaysia or disposal of shares in real property companies within 5 years from the date of purchase. The scale rates from 5% to 30% depending on year of possession is no longer applicable.
However, RPGT is exempted or no RPGT is levied for disposal of real property or shares in real property companies held for more than 5 years. You are tax free to sell in 6th year onwards.
Some tax exemptions are available for individuals, even though they are disposed of within the first 5 years from the date of purchase:-

1. Disposal of a residential property once in a lifetime by an individual.
   
2. Transfer as gifts between parent and child, husband and wife, grandparent and grandchild (transfer between sibling/brothers or sisters is not applicable); and
   
3. Exemption of RM10,000 or 10% of the chargeable gain, whichever is greater, for each disposal of a property by an individual. Chargeable gain is generally meaning sale proceeds less purchase cost.

	Example:
	Sale proceeds	500,000
	Less: original purchase cost	(300,000)
	Chargeable gain	200,000
	Less: exemption of RM10,000 or 10%	(20,000)
	Taxable amount	180,000
	RPGT tax at 5%	9,000