Real Property Gains Tax (RPGT)
** Scrapped From 1st April 2007 **
Capital gains are generally not subject to tax in Malaysia. Real property gains tax is charged on gains arising from the disposal of real property situated in Malaysia or of interest, options or other rights in or over such land as well as the disposal of shares in real property companies. The tax rates for Malaysian citizens and permanent residents are as follows:
Citizens and permanent residents also enjoy an exemption of RM5,000 or 10% of the gains whichever is the greater, besides a one-time tax exemption on the gains arising from the disposal of one private residence.
For non-citizens and non-permanent resident individuals, gains from the disposal of real property within five years are taxed at a flat rate of 30%, after which the tax rate will be 5%.
Real Property Gains
Real property gains are gains derived from disposal, sell, convey, assign, transfer, settle or alienate whether by agreement or by force of law which fall under chargeable asset. All chargeable assets must be made during the year of assessment and all particulars must be furnished as requested.
Chargeable Assets
An Act enacted by the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong as the Real Property Gain Tax Act 1976. Interpreted chargeable asset as real property gain tax, shall be charged in accordance to this Real Property Gain Tax Act 1976 in respect of chargeable gain accruing on the disposal of any real property. Subject to this Act, the chargeable gain from disposal of real property shall be charged according to the category Tax Rates in Ringgit Malaysia.
Allowable Loss
Allowable loss means a loss made after the disposal. Tax relief shall be allowed in respect of the following accrued:
1. If the disposal price is less than the acquisition price.
2. If the disposal price is equal to the acquisition price
First Payment
The buyer must sign the S & P Agreement at the time of the first payment of 10% of the purchase price to the developer. Ensure that the date of the 1st payment and the date of the S & P Agreement having been signed.
Architect’s Certificate
Every notice requesting for payment shall be supported by a certificate signed by the developer’s architect or qualified engineer.
Interest on late payment
If the buyer or end financier of the buyer fails to settle the instalment within 14 days after receipt of the written notice, the buyer shall be liable to pay interest to the developer calculated from day to day at the rate of 10% p.a. on the unpaid instalment.
Maintenance & Management Fee
The buyer shall contribute towards maintenance charges such as refuse removal, upkeep of public drains and grass-cutting on the road reserves as from the date of delivery of vacant possession for landed property and as from the date of issuance of strata titles and the formation of the Management Corporation.
Payment of quit rent, assessment, etc.
As from the date of S & P Agreement, the buyer shall be responsible for the payment of quit rent, rates, assessment and other charges on the subject property.
Vacant possession of the building with water and electricity ready for connection must be delivered within 24 calendar months from the date of the agreement (for landed property) and 36 months (for subdivided buildings)
Application for certificate of Fitness for Occupation
At the time of delivery of vacant possession, the developer must have applied for CFO from the relevant authorities (Form E of UBBL)
Entry into Occupation
The buyer is only entitled to enter into occupation of the property upon issuance of CFO by the relevant authorities. Renovations may only be carried out upon issuance of CFO and approval of the plans by the relevant authorities.
Payment of Damages
If the developer fails to hand over vacant possession of the building/parcel within the prescribed time (24 months from the date of the S & P Agreement for landed properties and 36 months fro sub-divided properties), the developer shall pay immediately to the buyer liquidated damages to be calculated from day to day at the rate of 10% p.a. of the purchase price.
Claim for damages & time limit
The buyer may claim damages from the developer before the expiry of 6 years from the date of vacant possession in accordance with the Limitation Act 1953.
Defect Liability Period
With effect from 1 August 1996, the defect liability period shall be 18 months from the date of delivery of vacant possession.
Formation of Management Corporation
A Management Corporation shall be formed by the buyers upon issuance of separate strata titles for the parcels and transfer into the buyers’ names. Among other functions, the Management Corporation shall be responsible to insure and to maintain the building.
Enquiries & Complaints
You may contact:
Control & Enforcement Section,
Ministry of Housing & Local Government,
Block K, Level 4, Pusat Bandar Damansara,
50782 Kuala Lumpur.
Tel: 03-354 7033
Fax: 03-252 5409
This section is a division under the Ministry of Housing & Local Government and is responsible fro the implementation and enforcement of the provisions of the housing Developers’ (Control & Licensing) Act 1966 (Act 118).
Prepared by:
Control & Enforcement Section,
Ministry of Housing & Local Government,
Block K, Level 4, Pusat Bandar Damansara,
50782 Kuala Lumpur.
| Company | Individual | |
| Disposal within 2 years | 30% | 30% |
| Disposal in the 3rd year | 20% | 20% |
| Disposal in the 4th year | 15% | 15% |
| Disposal in the 5th year | 5% | 5% |
| Disposal in the 6th year and thereafter | 5% | NIL |
Citizens and permanent residents also enjoy an exemption of RM5,000 or 10% of the gains whichever is the greater, besides a one-time tax exemption on the gains arising from the disposal of one private residence.
For non-citizens and non-permanent resident individuals, gains from the disposal of real property within five years are taxed at a flat rate of 30%, after which the tax rate will be 5%.
Real Property Gains
Real property gains are gains derived from disposal, sell, convey, assign, transfer, settle or alienate whether by agreement or by force of law which fall under chargeable asset. All chargeable assets must be made during the year of assessment and all particulars must be furnished as requested.
Chargeable Assets
An Act enacted by the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong as the Real Property Gain Tax Act 1976. Interpreted chargeable asset as real property gain tax, shall be charged in accordance to this Real Property Gain Tax Act 1976 in respect of chargeable gain accruing on the disposal of any real property. Subject to this Act, the chargeable gain from disposal of real property shall be charged according to the category Tax Rates in Ringgit Malaysia.
Allowable Loss
Allowable loss means a loss made after the disposal. Tax relief shall be allowed in respect of the following accrued:
1. If the disposal price is less than the acquisition price.
2. If the disposal price is equal to the acquisition price
First Payment
The buyer must sign the S & P Agreement at the time of the first payment of 10% of the purchase price to the developer. Ensure that the date of the 1st payment and the date of the S & P Agreement having been signed.
Architect’s Certificate
Every notice requesting for payment shall be supported by a certificate signed by the developer’s architect or qualified engineer.
Interest on late payment
If the buyer or end financier of the buyer fails to settle the instalment within 14 days after receipt of the written notice, the buyer shall be liable to pay interest to the developer calculated from day to day at the rate of 10% p.a. on the unpaid instalment.
Maintenance & Management Fee
The buyer shall contribute towards maintenance charges such as refuse removal, upkeep of public drains and grass-cutting on the road reserves as from the date of delivery of vacant possession for landed property and as from the date of issuance of strata titles and the formation of the Management Corporation.
Payment of quit rent, assessment, etc.
As from the date of S & P Agreement, the buyer shall be responsible for the payment of quit rent, rates, assessment and other charges on the subject property.
Vacant possession of the building with water and electricity ready for connection must be delivered within 24 calendar months from the date of the agreement (for landed property) and 36 months (for subdivided buildings)
Application for certificate of Fitness for Occupation
At the time of delivery of vacant possession, the developer must have applied for CFO from the relevant authorities (Form E of UBBL)
Entry into Occupation
The buyer is only entitled to enter into occupation of the property upon issuance of CFO by the relevant authorities. Renovations may only be carried out upon issuance of CFO and approval of the plans by the relevant authorities.
Payment of Damages
If the developer fails to hand over vacant possession of the building/parcel within the prescribed time (24 months from the date of the S & P Agreement for landed properties and 36 months fro sub-divided properties), the developer shall pay immediately to the buyer liquidated damages to be calculated from day to day at the rate of 10% p.a. of the purchase price.
Claim for damages & time limit
The buyer may claim damages from the developer before the expiry of 6 years from the date of vacant possession in accordance with the Limitation Act 1953.
Defect Liability Period
With effect from 1 August 1996, the defect liability period shall be 18 months from the date of delivery of vacant possession.
Formation of Management Corporation
A Management Corporation shall be formed by the buyers upon issuance of separate strata titles for the parcels and transfer into the buyers’ names. Among other functions, the Management Corporation shall be responsible to insure and to maintain the building.
Enquiries & Complaints
You may contact:
Control & Enforcement Section,
Ministry of Housing & Local Government,
Block K, Level 4, Pusat Bandar Damansara,
50782 Kuala Lumpur.
Tel: 03-354 7033
Fax: 03-252 5409
This section is a division under the Ministry of Housing & Local Government and is responsible fro the implementation and enforcement of the provisions of the housing Developers’ (Control & Licensing) Act 1966 (Act 118).
Prepared by:
Control & Enforcement Section,
Ministry of Housing & Local Government,
Block K, Level 4, Pusat Bandar Damansara,
50782 Kuala Lumpur.
