The Changes of Real Estate Property Gain Tax (RPGT)

During the online session featuring Richard Oon, the Founder and Managing Director of Consulnet Tax Services Sdn Bhd (website: Malaysia Taxation 101), Richard shared about the changes of Real Estate Property Gain Tax over the years since 1995 and how it is going to affect property investors. Here is what he shared to the live audience:

The rate has undergone changes throughout the years. From 27 October 1995 until 31 March 2007, it has been 30% for year one and two, and 20% on year three, 15% on forth, 5% on fifth and 0% on year six onwards. There was an exemption period on 1st April 2007 until 31 December 2009 where it is not subjected to tax.

After the 2 years 8 months of non-taxation upon disposal of property regardless of the year of disposal, in 2010, the RPGT is flat 5% for 5 years. This rate began 1 January 2010 until 31 December 2011. Another revision was done in the year 2012, 10% for the first two years and 5% for the next 3 years. With effect 2013, the rate is up 5%. Henceforth, the current rate is 15% for the first two years and 10% for the next 3 years.

The rates have changed through the years as it is affected by the statutory order. It acts like a filter and when it was placed in the year 2007 – where nothing flows through; hence it was zero percent where property investors are not subjected to any tax upon disposal of any property at any time. After which, it was changed to that there was a taxation amount subjected to the year of disposal. From the outlook of this, there might be further changes after the coming election. A revision of the RPGT will affect the property investors.

If you are a Premium Webinar Members, you can watch the full replay of Tax Issues Affecting Property Investors 2013 here.