RPGT Malaysia — Real Property Gains Tax Explained (2026)

Selling a property in Malaysia triggers a tax that most owners only think about when they are already sitting across from a buyer. Real Property Gains Tax (RPGT) can take a meaningful slice of your profit — 30% if you sell in the first three years — or nothing at all if you have held long enough and are a Malaysian citizen.

Understanding the rates, how to calculate your actual chargeable gain, and which exemptions apply to your situation is not optional for anyone planning a property sale. This guide covers the full picture before you move.

Last updated 11 October 2026 · money.com.my Editorial

What is RPGT and who administers it?#

Real Property Gains Tax is a tax on the gain — the profit — from disposing of real property in Malaysia. It applies to the sale, transfer, or disposal of:

• Land (with or without buildings)
• Shares in a Real Property Company (RPC) — a company where 75%+ of its tangible assets are real property

RPGT does not apply to rental income (that is income tax), nor to the full sale price — only to the gain between what you paid and what you received.

The tax is administered by the Inland Revenue Board of Malaysia (LHDN — Lembaga Hasil Dalam Negeri). The current RPGT rate structure was established under the Finance Act 2021 and applies from 1 January 2022 onward. Previous amendments (notably in Budget 2019 which reinstated RPGT for year 6+ sales) were reversed for citizens and PRs under the 2021 Act.

RPGT applies to:

• Malaysian citizens and permanent residents (PRs)
• Foreign nationals (non-citizens, non-PRs)
• Companies, trusts, and other entities incorporated in Malaysia
• Foreign companies

The rates differ significantly between these categories.

What are the RPGT rates in 2026?#

The holding period is measured from the acquisition date to the disposal date. Where there is a written agreement, each date is the date of that agreement: you count from the SPA under which you bought to the SPA under which you sell. The completion date is used only where there is no written agreement (Schedule 2 para 15, RPGT Act 1976). "Within three years" means the disposal SPA is dated less than three years after the acquisition SPA; the 4th year is the year after that, and so on.

Source: RPGT Act 1976 (Act 169), Schedule 5: Part I (citizens and permanent residents), Part II (companies incorporated in Malaysia, trustees and registered bodies) and Part III (everyone else, including foreigners and foreign companies). LHDN's RPGT rates page gives the same rates.

Key differences to note:

• Citizens and PRs: The 0% rate in Year 6+ is the major relief — no RPGT once five full years have passed since the acquisition date.
• Foreigners: Pay 30% for the first five years, then 10% from Year 6 onward. There is no zero-rate tier and no lifetime exemption available.
• Companies: Never reach 0%. The minimum rate for a Malaysian-incorporated company is 10% regardless of holding period.

How is your chargeable gain calculated?#

RPGT is not applied to the full sale price. It is applied to the chargeable gain, calculated as:

Chargeable Gain = Disposal Price − Acquisition Price − Allowable Expenses

Disposal Price#

The disposal price is typically the agreed sale price in the SPA. LHDN may substitute a market value if the disposal is below market value (for example, a transfer between related parties at an artificially low price).

Acquisition Price#

The acquisition price is what you originally paid, including:

• The purchase price in your original SPA
• Stamp duty paid on the original purchase
• Legal fees paid on the original purchase
• Valuation fees paid at acquisition

If you acquired the property by inheritance or gift, the market value at the time of acquisition is generally used. A gift between close family members from a donor who is a citizen follows a different rule: see Gifts Between Family Members below.

Allowable Expenses#

These are capital expenditure costs that can be deducted from your gain. Allowable expenses include:

One mistake sellers commonly make: they include years of maintenance spending in their allowable expense claim, which LHDN disallows during assessment. Only expenditure that permanently enhanced the property's structure or value qualifies.

Worked Example: RM400k Purchase, RM600k Sale#

Scenario: You are a Malaysian citizen. You purchased a freehold terrace house in Petaling Jaya for RM400,000 in March 2022 and sell it in April 2026 — a holding period of just over 4 years, so the sale is in the 5th year.

Transaction details:

Chargeable gain calculation:

RPGT owed: 5th-year rate for a Malaysian citizen = 15%

RM134,500 × 15% = RM20,175 (before the individual's exemption)

The individual's exemption (Schedule 4 para 2). An individual deducts RM10,000 or 10% of the chargeable gain, whichever is greater. Here 10% of RM134,500 is RM13,450, which is more than RM10,000:

RM134,500 − RM13,450 = RM121,050 chargeable

RM121,050 × 15% = RM18,157.50

Now consider the same scenario but sold one year earlier — in April 2025 (3 years 1 month, the 4th year):

RM134,500 × 20% = RM26,900 (RM24,210 after the individual's exemption)

And sold within three years (March 2024, 2 years):

RM134,500 × 30% = RM40,350 (RM36,315 after the individual's exemption)

Holding from March 2024 to April 2026 cuts the RPGT from RM40,350 to RM20,175, a saving of RM20,175 on the same property (before the exemption). Holding into the 6th year (a sale SPA dated after March 2027) saves the remaining RM20,175 as well (RM18,157.50 after the exemption): total RPGT of zero.

This is why holding period is the single most important variable in Malaysian property investment timing.

When do you have to file RPGT?#

RPGT must be filed within 60 days from the disposal date — the date the SPA is signed, not the date of completion or handover.

Forms Required#

All CKHT forms can be filed via LHDN's online portal at hasil.gov.my or at any LHDN branch. File early — the 60-day window runs from the SPA date, not the date you receive the proceeds.

Missing the 60-day deadline attracts a penalty under Section 29 of the RPGT Act: 10% of the tax payable, with additional interest accruing. File even if you believe your RPGT is zero — exemptions must still be claimed via CKHT 3, not assumed.

How does the RPGT retention sum work?#

Under section 21B of the RPGT Act, the buyer (or the buyer's solicitor in a sub-sale transaction) must retain part of the disposal price and remit it to LHDN within 60 days of the disposal date. This applies regardless of whether RPGT is actually owed. How much depends on the seller:

Source: RPGT Act 1976, s.21B(1) and (1A).

The mechanics:

1. Buyer's solicitor deducts the retention sum from the purchase price before releasing funds to the seller's solicitor
2. Solicitor files CKHT 2A and remits the retention sum to LHDN within 60 days
3. LHDN assesses the seller's CKHT 1A and determines actual tax owed
4. If actual RPGT < amount retained → LHDN issues a refund to the seller
5. If actual RPGT > amount retained → seller must pay the balance separately

On a RM600,000 sale by a citizen, the 3% retention is RM18,000. In the worked example above, the actual RPGT owed after the individual's exemption is RM18,157.50, so there is no refund: the seller owes LHDN about RM157.50 more than was retained. (Without the Schedule 4 exemption the tax would be RM20,175 and the shortfall RM2,175.) Where the tax owed is less than the amount retained, LHDN refunds the difference after assessing the seller's return.

If you are selling a property where you expect zero RPGT (e.g. Year 6+ citizen seller), you still cannot skip the retention sum — the buyer is legally required to withhold it. You claim it back by filing CKHT 1A and, if applicable, CKHT 3 (exemption claim).

Which RPGT exemptions can property sellers use?#

1. One-Time Lifetime Exemption — Malaysian Citizens and Permanent Residents#

Every Malaysian citizen and Malaysian permanent resident is entitled to one exemption, once in their lifetime, on the gain from disposing of a private residence (rumah kediaman persendirian). This exempts the entire chargeable gain from RPGT — effectively a 0% rate regardless of holding period.

Conditions (LHDN):

• Applies to Malaysian citizens and Malaysian permanent residents (not foreigners)
• The property must be a private residence: a building, or part of one, in Malaysia that you own and that is occupied, or certified fit for occupation, as a home
• Only one disposal may benefit from this exemption per lifetime
• You elect it on Form CKHT 3 through e-CKHT, and the election is irrevocable

Source: LHDN, RPGT exemptions.

Strategic use: If you have two residential properties to sell, use the lifetime exemption on the one with the larger chargeable gain, and time the sale of the other to Year 6+ where the 0% rate applies anyway. The exemption is most valuable when you are selling before the 5-year mark.

2. Low-Cost Housing Exemption#

Disposals of low-cost housing (rumah kos rendah) and low-medium cost housing are fully exempted from RPGT. The specific price thresholds for what qualifies as low-cost are defined by state governments and vary by state, but generally refer to properties originally sold under government affordable housing schemes at prices below RM100,000–RM150,000.

3. Gifts Between Family Members (Schedule 2 para 12)#

Under Schedule 2 para 12(2) of the RPGT Act, a gift between husband and wife, parent and child, or grandparent and grandchild is treated as follows:

• The donor is deemed to have received no gain and suffered no loss, but only if the donor is a Malaysian citizen. No RPGT is triggered at the time of the gift in that case
• The recipient is deemed to acquire the property at the price the donor paid, plus the donor's permitted expenses (para 12(2)(c)), not at its market value on the day of the gift
• Whether the recipient also takes over the donor's acquisition date, and so the donor's holding period, is not confirmed. Para 12(2)(c) deals with the acquisition price only, and we have not found a provision that carries over the donor's date. Ask your solicitor or LHDN before relying on it to work out the rate on a later sale

This is a legitimate estate planning tool, but the deferred gain does not disappear — it is transferred to the recipient, at the donor's cost, to manage upon their eventual disposal.

4. Property Acquired Before 2013 (Citizens and PRs) or Before 1970#

Where a property was acquired before 1 January 1970, Schedule 2 para 4(3) of the RPGT Act replaces its acquisition price and incidental costs with its market value on 1 January 1970. For citizens and permanent residents (disposals taxed under Part I of Schedule 5), para 2A reads 1 January 1970 as 1 January 2013. So a citizen or PR who acquired a property before 1 January 2013 uses its market value on 1 January 2013 in place of the price paid; a company or a foreigner uses the 1 January 1970 value, for a property acquired before 1970. This can significantly reduce the chargeable gain on older properties.

RPGT and the Stamp Duty Connection#

When selling a property, your upfront costs also include stamp duty on the new SPA — but that stamp duty is paid by the buyer, not the seller. As the seller, your cost exposure is:

• RPGT (if applicable)
• Agent commission (2%–3%)
• Legal fees for the SPA and transfer documentation
• Any outstanding quit rent (cukai tanah) or assessment (cukai pintu) arrears that must be settled before transfer

See our stamp duty guide for the full breakdown of what the buyer pays on their side of the transaction.

If you are simultaneously buying a replacement property, you are managing two transactions at once — RPGT exposure as a seller, and stamp duty plus loan eligibility as a buyer. Read the home loan guide before committing to a simultaneous sale and purchase — the timing of your RPGT retention sum refund can affect your available cash for the new purchase.

Tax Planning Considerations Before You Sell#

Holding Period Is the Most Powerful Variable#

For Malaysian citizens and PRs, the difference between a 5th-year sale (15% rate) and a 6th-year sale (0% rate) on a RM134,500 gain is RM20,175 (RM18,157.50 after the individual's Schedule 4 exemption). The question is whether waiting 12 more months makes sense given market conditions, opportunity cost, and your personal circumstances. Run the numbers both ways.

Lifetime Exemption: Use It Strategically#

Do not use the lifetime exemption on a Year 6+ sale — the rate is already 0% without it. Reserve the exemption for a situation where you must sell before the 5-year mark and the gain is significant. Once used, it is gone permanently.

Document All Capital Expenditure#

Keep every invoice and receipt for renovation work throughout your ownership period. Structural work, extensions, built-in cabinetry permanently fixed to the property — these all reduce your chargeable gain. A RM28,000 renovation that reduces a RM134,500 gain to RM106,500 saves RM4,200 in RPGT at the 15% rate, or RM8,400 at the 30% rate (before the individual's exemption). The documentation habit pays off more at higher rate periods.

RPGT vs Income Tax on Property Income#

If LHDN determines that you are in the business of property trading (frequent buying and selling, short holding periods, declared business income), your gains may be reclassified as income tax rather than RPGT. Income tax rates go up to 30% for higher incomes — and unlike RPGT, there is no holding-period relief and no 0% tier. This reclassification risk is most relevant for property investors with multiple short-cycle disposals.

Connecting RPGT to Your Broader Property and Tax Strategy#

RPGT is one piece of the property ownership cost picture. For first-time buyers and first-time sellers:

• If you are still planning your purchase, read the first-time home buyer guide for a full breakdown of schemes, eligibility, and the purchase process
• Property ownership generates rental income that must be declared — see the income tax reliefs guide for what expenses are deductible against rental income
• If you are filing your annual tax return at the same time as processing an RPGT transaction, the income tax filing guide covers the e-filing process step by step

RPGT is separate from your annual income tax return. File CKHT forms within 60 days of disposal — independently of the April/May income tax filing cycle.

Summary: What You Need to Know Before Selling#

Amendment, 4 October 2026. This guide said the one-time lifetime exemption was for Malaysian citizens only and that permanent residents were not entitled to it. LHDN states the exemption under section 8 is granted where the individual is a Malaysian citizen or a Malaysian permanent resident, so both now appear above. The FAQ also named the wrong form (CKHT 1A); the election is made on Form CKHT 3 through e-CKHT and is irrevocable.

Amendment, 11 October 2026. This guide's rate table was shifted one year early for citizens, permanent residents and companies. It said 20% in year 3, 15% in year 4 and 5% in year 5 for citizens and PRs (companies: 20%, 15%, 10%). Schedule 5 of the RPGT Act 1976 (Act 169, AGC updated text as at 1 January 2025) sets, for citizens and PRs, 30% within three years, 20% in the 4th year, 15% in the 5th year and 0% from the 6th year; for companies incorporated in Malaysia the same, but 10% from the 6th year; for foreigners and foreign companies 30% in years 1 to 5, then 10% (unchanged). LHDN's RPGT rates page gives the same table. As a result:

• The introduction said 30% applies "in the first two years"; it is the first three years.
• The FAQ said a January 2020 purchase sold in December 2025 paid 5%. Five years and eleven months is past five years, so that sale is in the 6th year and pays 0% for citizens and PRs.
• Worked example (bought March 2022): an April 2026 sale is in the 5th year at 15%, RM20,175 (was 5%, RM6,725); an April 2025 sale is in the 4th year at 20%, RM26,900 (was 15%, RM20,175); a March 2024 sale stays at RM40,350. The saving from holding to April 2026 is RM20,175 (was RM33,625), and the 0% rate starts with a sale after March 2027 (was March 2028). The 5th-year versus 6th-year difference is RM20,175 (was RM6,725), and the RM28,000 renovation saves RM28,000 × 15% = RM4,200 (was RM1,400 at 5%).
• The worked example now applies the individual's exemption in Schedule 4 para 2 (RM10,000 or 10% of the chargeable gain, whichever is greater), which the guide had left out: RM134,500 − RM13,450 = RM121,050, and at 15% that is RM18,157.50. Against the RM18,000 retained, the seller owes about RM157.50 more; the guide had said the seller would receive a refund of RM11,275.
• The rates table note said PRs do not qualify for the private-residence exemption. Section 8 covers a citizen or a permanent resident, as the exemptions section and the 4 October amendment already say; that sentence is removed.
• The holding period was said to run "both dates inclusive" from "the SPA or instrument of transfer date, whichever is earlier". Under Schedule 2 para 15, where there is a written agreement both dates are the date of the agreement (SPA to SPA); completion is used only where there is no written agreement.
• The retention sum was given as 3% for everyone. Under s.21B it is 3% for citizens and PRs, 5% for companies incorporated in Malaysia, trustees and registered bodies selling within three years of acquisition, and 7% for foreigners who are not PRs and for foreign companies.
• The rule for older property said properties bought before 1 January 2000 use the 31 December 2001 market value. Schedule 2 para 4(3) uses the market value at 1 January 1970, which para 2A reads as 1 January 2013 for citizens and PRs.
• Family gifts were cited to "Section 8"; the rule is Schedule 2 para 12(2), and the no-gain, no-loss treatment applies only where the donor is a citizen. The guide said the recipient takes over the donor's acquisition date and holding period; para 12(2)(c) carries over the acquisition price only, and we have not confirmed that the date carries over, so the guide now says so.

Sources: RPGT Act 1976 (Act 169), AGC updated text as at 1 January 2025, s.8, s.21B, Schedule 2 paras 2A, 4(3), 12(2) and 15, Schedule 4 para 2 and Schedule 5; LHDN, RPGT rates and exemptions, checked 10 October 2026.

Amendment, 11 October 2026. Structural change only: a short answer was added at the top, section headings were rewritten as the questions they answer, and one question was added to the FAQ from this guide's own text. No figure, rule or source was changed. Every figure in the short answer already appears in the body of this guide, and the short answer uses the Schedule 5 rates corrected in the amendment above. It does not rely on the family-gift holding period, which remains unconfirmed.