Real Property Gains Tax (RPGT) in Malaysia: rates and how to calculate it
Figures checked against official sources on
RPGT is charged on the gain when you sell property in Malaysia, at a rate set by how long you held it. A Malaysian citizen or permanent resident pays 30% on a sale up to the end of the 3rd year, 20% in the 4th year, 15% in the 5th year and nothing from the 6th year. Foreigners pay 30% for the first five years and 10% after; companies pay 30%, 20%, 15% and then 10%.[1]
RPGT rates for disposals in 2026
The rate depends on who is selling and on the holding period — the time between acquiring and disposing of the property. The rates for citizens and permanent residents have applied to disposals since 1 January 2022; the rates for companies and foreigners since 1 January 2019.[1]
| Disposal | Citizens and PRs | Malaysian companies | Foreigners and foreign companies |
|---|---|---|---|
| Within 3 years | 30% | 30% | 30% |
| In the 4th year | 20% | 20% | 30% |
| In the 5th year | 15% | 15% | 30% |
| 6th year onwards | 0% | 10% | 10% |
The Budget 2027 tax measures, presented on 9 October 2026, propose no change to RPGT. A loss on one disposal can be set against gains on later disposals; from year of assessment 2026 an unabsorbed loss can be carried forward for up to nine consecutive years of assessment.[10],[8],[9]
How to calculate RPGT
- Disposal price: the sale price, less the costs of selling (fees paid to a valuer, agent or lawyer) and money spent enhancing or preserving the property, such as a renovation.
- Acquisition price: what you paid, plus the incidental costs of buying.
- Chargeable gain: disposal price minus acquisition price.
- Individuals then deduct RM10,000 or 10% of the chargeable gain, whichever is greater.
- Multiply what is left by the rate for your holding period.
Loan interest is not an allowable cost, and neither is the fee for preparing the RPGT return. For a citizen’s or PR’s property, money spent before 1 January 2013 is not allowed either.[3]
- Sale price
- RM600,000
- Less agent and legal fees on the sale
- − RM15,000
- Disposal price
- RM585,000
- Less acquisition price
- − RM450,000
- Chargeable gain
- RM135,000
- Less exemption (greater of RM10,000 or 10%)
- − RM13,500
- Gain taxed
- RM121,500
- RPGT rate, 4th year
- 20%
- RPGT payable
- RM24,300
RPGT exemptions
- Private residence: a Malaysian citizen or permanent resident can claim a full exemption on the gain from one private residence, once in a lifetime. The election is made on Form CKHT 3 through e-CKHT and cannot be withdrawn.
- RM10,000 or 10% of the chargeable gain, whichever is greater — individuals only.
- Transfers between spouses, and gifts between parents and children or grandparents and grandchildren, are treated as no gain and no loss when the giver is a Malaysian citizen.
The buyer’s retention sum
The buyer must hold back part of the price and pay it to LHDN within 60 days of the disposal date. The amount goes towards the seller’s RPGT. A buyer who does not pay it is charged an increase of 10% of the unpaid amount.[6]
| Seller | Retention |
|---|---|
| Citizen or permanent resident | 3% of the price |
| Malaysian company, disposing within 3 years | 5% |
| Malaysian company, 4th year onwards | 3% |
| Foreigner or foreign company | 7% |
Source[6]
In the example above, the buyer retains 3% of RM600,000, which is RM18,000. From disposals in year of assessment 2026, the buyer may instead remit the seller’s deemed tax if the seller has notified it first, whichever amount is lower.[6]
Filing deadlines
- The seller files the RPGT return (Form CKHT 1A, 1B or 3) within 60 days of the disposal date.
- The buyer files Form CKHT 2A within 60 days.
- Since 1 January 2025 the returns must be filed online through e-CKHT on MyTax; paper forms are not accepted.
- For disposals from year of assessment 2025, any tax or balance due is payable within 90 days of the disposal date.
Source[7]
Frequently asked questions
Do Malaysians pay RPGT after 5 years?
No. A Malaysian citizen or permanent resident who disposes of property in the 6th year after acquiring it or later pays RPGT at 0%. Companies and foreigners still pay 10%.[1]
What is the RPGT rate for foreigners in Malaysia?
Individuals who are not citizens or permanent residents pay 30% on disposals in the first five years and 10% from the 6th year onwards.[1]
How much does the buyer retain for RPGT?
The buyer holds back 3% of the price when the seller is a citizen or permanent resident, 7% when the seller is a foreigner, and 5% or 3% when the seller is a Malaysian company. It is paid to LHDN within 60 days of the disposal.[6]
What is the once-in-a-lifetime RPGT exemption?
A Malaysian citizen or permanent resident can exempt the gain on the disposal of one private residence, once in a lifetime, by electing it on Form CKHT 3. The election cannot be withdrawn.[4]
Can I deduct renovation costs from my RPGT?
Money spent to enhance or preserve the value of the property, such as a renovation, is deducted in working out the disposal price, which lowers the gain. Loan interest is not deductible.[3]
Is there RPGT when I transfer property to my spouse or children?
A transfer between spouses, or a gift between parents and children or grandparents and grandchildren, is treated as giving no gain and no loss when the giver is a Malaysian citizen, so no RPGT arises on it.[5]
Sources
- Real Property Gains Tax rates (Kadar Cukai Keuntungan Harta Tanah) — Inland Revenue Board of Malaysia (LHDN), checked
- Real Property Gains Tax Act 1976 (Act 169), updated text as at 1 June 2023 — Attorney General’s Chambers, hosted by LHDN, checked
- Disposal price and acquisition price — LHDN, checked
- RPGT exemptions (Pengecualian) — LHDN, checked
- Disposal price deemed equal to acquisition price (transfers between family members) — LHDN, checked
- Retention and remittance of money by the acquirer — LHDN, checked
- Responsibilities of the disposer and acquirer — LHDN, checked
- Determining the chargeable gain or allowable loss — LHDN, checked
- LHDN response to the joint memorandum on Budget 2026 and the 2025 tax bills (11 December 2025) — LHDN, checked
- Budget 2027 tax measures, 9 October 2026 (proposals until enacted) — Ministry of Finance Malaysia, checked