Some knowledge about Real Property Gains Tax (RPGT)

Some knowledge about Real Property Gains Tax (RPGT)

Today I will talk about the Real Property Gains Tax (RPGT) / Cukai Keuntungan Harta Tanah (CKHT).

The RPGT is a tax that the property owner must declare to the Inland Revenue Department (LHDN) when the property owner sells the property. As long as the sale price of the property is higher than the price at which the property owner acquired the property, then the property owner must pay the real property gain tax which is the RPGT.

Some small knowledge about the real property gain tax:

1)       The tax rate of the property gain tax is different according to the property owner’s

sale of the house in the first few years.

2)       The tax rate of the property gain tax may change every year. For example, before 2019, the sale of a house for six years or more is not required to pay real property gain tax.

3)       When calculating the acquisition price, any house of six years or more will be based on the market price in 2013. In other words, even if you bought a house at RM200k 15 years ago, the government will still use the market price of the house in the year of 2013 to calculate how much the house has appreciated so far.

4)       According to the law, the buyer must use the deposit to help the seller prepay the real property gain tax.

5)       Even if you transfer the house to your relatives and there is no monetary return, you still have to pay the real property gain tax! Only a few types of kinship can be exempted from the tax: spouse, parents and children, and grandparents and grandchildren.

6)       Every individual would be able to enjoy only one time of fully exempted property gain tax once in his lifetime. The condition is that the property sold must be for residential purposes only. So I would say use it with caution.

7)       If the sale price of the property is less than RM200k, then no real property gain tax would be needed to pay.

8)       The real property gain tax is actually a very favorable government policy to combat real estate speculation.


Note: This article is for reference only and does not constitute legal advice. Therefore, if readers have any legal questions or needs, they should seek professional legal advice. If the reader suffers any loss by relying on this article, the author will not be held responsible.

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