Real Property Gains Tax (RPGT) in Malaysia: Rates, Calculation and Exemptions

Real Property Gains Tax (RPGT) is a tax on the gain you make when you dispose of (sell or transfer) real property in Malaysia for more than it cost you. How much you pay depends on two things: how long you held the property and which category of seller you fall into. For Malaysian citizens and permanent residents, RPGT is 30% if you sell within three years, 20% in the fourth year, 15% in the fifth year and 0% from the sixth year onwards. The buyer must also retain part of the price (3%, 5% or 7%) and pay it to the Inland Revenue Board of Malaysia (LHDN) within 60 days.

This guide explains the current rates, how to calculate RPGT, the retention sum, the forms and deadlines, and the main exemptions, based on LHDN's published rules.

What is RPGT?

RPGT is charged under the Real Property Gains Tax Act 1976 and is administered by LHDN (also called IRBM). It applies to gains from the disposal of land, buildings and other real property in Malaysia, and to shares in a real property company (RPC) for certain disposers.

RPGT is only charged on a gain. If the disposal price is the same as or lower than the acquisition price, there is no chargeable gain.

Current RPGT rates

LHDN groups disposers into three categories under Schedule 5 of the Act:

• Part I: disposers other than those in Parts II and III, for example Malaysian citizens, permanent residents (PRs) and partnerships.

• Part II: companies incorporated in Malaysia, trustees of a trust and bodies of persons registered under any written law.

• Part III: individuals who are not citizens and not permanent residents, and foreign companies.

The 0% rate for citizens and PRs disposing in the sixth year or later has applied since 2022. Older rates, such as the 5% sixth-year rate that applied from 2019 to 2021, and the temporary PENJANA exemption for residential disposals between 1 June 2020 and 31 December 2021, no longer apply.

How is the holding period worked out?

The holding period runs from the date you acquired the property to the date you dispose of it. According to LHDN, where there is a written agreement, the date of disposal is the date of that agreement. In a house sale, that is normally the date the Sale and Purchase Agreement (SPA) is signed, not the date the transfer is registered. The buyer's date of acquisition is the same as the seller's date of disposal.

If there is no written agreement, the date of disposal is the earlier of the date ownership is transferred or the date the full consideration is received.

Property that was inherited, gifted or acquired under a court order has its own rules on the acquisition date and price. Check your position before you sign an SPA.

How to calculate RPGT

The basic steps LHDN uses are:

1. Disposal price = the sale price less the incidental costs of disposal (for example legal fees, agent's commission and valuation fees).

2. Acquisition price = the purchase price plus the incidental costs of acquisition (for example legal fees when you bought) and expenditure to enhance or preserve the property.

3. Chargeable gain = disposal price less acquisition price.

4. Individual exemption = RM10,000 or 10% of the chargeable gain, whichever is greater.

5. RPGT payable = RPGT rate x (chargeable gain less exemption).

Interest on your housing loan cannot be deducted. For property acquired before 1 January 2013, the market value on 1 January 2013 is used in the calculation, and expenditure incurred before that date is not allowed.

Worked example (citizen, selling in the fourth year)

This example is for illustration only.

In this example, the buyer retains 3% of the sale price (RM16,500) and pays it to LHDN. The seller must then pay the balance of RM5,640.

If you have more than one disposal in the same year of assessment, a loss on one disposal can be set off against a gain on another in that year. An unabsorbed loss can be carried forward for up to nine consecutive years of assessment.

The RPGT retention sum: 3%, 5% or 7%

Under section 21B of the Act, the buyer (acquirer) must retain part of the price and pay it to LHDN within 60 days after the date of disposal. In practice, the buyer's lawyer normally retains this amount from the purchase price.

The amount retained is that percentage or the whole of the money consideration, whichever is lower. From the 2026 year of assessment, LHDN also allows the buyer to remit an amount equal to the deemed assessment if the seller notifies that amount in advance. If the buyer fails to remit within 60 days, a penalty of 10% of the unpaid amount is imposed on the buyer.

The retention sum is not an extra tax. It is credited against the seller's RPGT liability. If the actual RPGT is lower (for example because of an exemption, or because the property was held for more than five years), the seller can claim a refund of the excess from LHDN.

RPGT forms and deadlines

According to LHDN, RPGT returns must be submitted within 60 days after the date of disposal or acquisition:

• CKHT 1A: submitted by the seller for the disposal of real property.

• CKHT 1B: submitted by the disposer for the disposal of RPC shares.

• CKHT 2A: submitted by the buyer for the acquisition of real property or shares.

• CKHT 3: notice to claim an exemption, including the election for the private residence exemption.

e-CKHT has been mandatory since 1 January 2025. RPGT returns must be filed electronically through e-CKHT on the MyTax portal (mytax.hasil.gov.my). Paper forms are no longer accepted and are treated as not submitted unless they are resubmitted through e-CKHT. You can file yourself or through an authorised representative, such as a licensed tax agent or a qualified lawyer.

Since 1 January 2025, under RPGT self-assessment, the return you submit is treated as the notice of assessment. For disposals from the 2025 year of assessment onwards, any balance of RPGT must be paid within 90 days of the date of disposal.

Penalties

• Failing to submit CKHT 1A or CKHT 1B within 60 days can attract a penalty under section 29(3) of the Act of up to three times the tax.

• An incorrect return can attract a penalty under section 30(2) of the Act of up to 100% of the tax undercharged.

• A buyer who fails to retain and remit the retention sum within 60 days is liable to a penalty of 10% of the unpaid amount.

Main RPGT exemptions

• RM10,000 or 10%: every individual who disposes of property is entitled to an exemption of RM10,000 or 10% of the chargeable gain, whichever is greater. If only part of a share is disposed of, the exemption is given proportionately.

• Private residence (once in a lifetime): a Malaysian citizen or PR can elect a full exemption on the gain from disposing of one private residence that has been occupied or certified fit for occupation. The election is made through form CKHT 3 on e-CKHT and cannot be withdrawn, so think carefully about whether to use it now.

• Transfers between family members: a transfer between husband and wife, parent and child, or grandparent and grandchild, where the donor is a Malaysian citizen, is treated as giving rise to no gain and no loss. See our guide on transferring property between family members for how this works in practice.

Exemptions are not automatic. They must be claimed correctly in the RPGT forms.

Companies and RPC shares

Companies pay the Part II rates. From 1 January 2024, disposals of RPC shares by companies fall under capital gains tax under the Income Tax Act 1967, not RPGT. Individuals who dispose of RPC shares remain subject to RPGT. Companies disposing of property or shares should get specific tax advice.

How ASCOLAW can help

In a house sale, the seller's and buyer's lawyers usually handle the RPGT documents, the retention sum and the e-CKHT filing within the 60-day window. ASCOLAW can check your acquisition date and holding period, prepare and file the RPGT forms, handle the retention sum in your transaction, and explain which exemptions may apply before you sign the SPA.

Fill in the ASCOLAW enquiry form below with brief details of the property and the transaction, and we will contact you to discuss the next steps.

Frequently asked questions

Do I pay RPGT if I sell my house after five years?

For citizens and PRs, the RPGT rate is 0% for disposals in the sixth year onwards. The RPGT forms must still be submitted, and the buyer must still retain 3% of the price. Any excess retention can be claimed back from LHDN.

Who pays the 3% retention?

The buyer must retain the amount and pay it to LHDN, but it comes out of the sale price. For the seller, it is a deduction from the sale proceeds that is credited against the seller's RPGT liability.

Is the SPA date or the transfer date used?

Where there is a written agreement, LHDN uses the date of the agreement as the date of disposal. In a house sale, that is normally the date the SPA is signed.

Can I submit the RPGT forms on paper?

No. Since 1 January 2025, RPGT returns must be submitted electronically through e-CKHT on MyTax. Paper forms are not accepted.

Can I use the private residence exemption more than once?

No. The private residence exemption can only be used once in a lifetime by a citizen or PR, and the election cannot be withdrawn.

This article is general information only and is not legal or tax advice on your specific facts. RPGT rates and procedures can change through the Budget or new exemption orders. Check the current position with LHDN or get professional advice before you act.

Related guides

• Legal Fees for Buying and Selling a House in Malaysia (2026 Guide)

• Balance Purchase Price in a Malaysian Property Sale: What It Means & When You Pay

• Transferring Property Between Family Members in Malaysia

• Buying Property in Malaysia as a Foreigner

• Conveyancing Lawyer in Malaysia: What They Do, Fees & How to Appoint One