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INTRODUCTION AND BASIS OF TAXATION

  1. Real Property Gains Tax (RPGT) is administered by Inland Revenue Board of Malaysia under the Real Property Gains Tax Act 1976 (RPGTA 1976). RPGTA was introduced on 7.11.1975 to replace the Land Speculation Tax Act 1974. Both Acts were introduced to restrict the speculative activity of real estate

  2. RPGT is charged on chargeable gain from disposal of chargeable asset such as houses, commercial buildings, farms and vacant land. With effect from 21.10.1988, RPGT is extended to gain from disposal of shares in real property company (RPC)

    • "ASSET" includes any land situated in Malaysia, and any interest, option or other right in or over such land.

    • "GAIN" means gain other than gain or profits chargeable with or exempted from income tax under Income Tax Act 1967 (ITA 1967) or in the case of unit trust, gain not treated as income under the ITA 1967.

  3. RPGT is imposed on disposers in the year of assessment where the disposal transaction takes place. The year of assessment shall be the calendar year.

  4. Disposer, whether resident in Malaysia or not, is taxable on gain accrued on the disposal of chargeable assets situated in Malaysia. Disposer includes individual, company, partnership, organisation, trustees and other chargeable persons.

  5. With the introduction of Capital Gains Tax (CGT) starting from January 1, 2024, profits from the disposal of SHT shares by companies, limited liability partnerships, trust bodies, and cooperatives, including Labuan entities, will no longer be subject to the Real Property Gains Tax Act 1976 (RPGTA 1976). Detailed information on CGT can be referred to in the CGT Guidelines for Unlisted Shares dated March 1, 2024.

  6. Starting from January 1, 2025, the Self-Assessment System for RPGT (STS RPGT) will be introduced, where the disposer is required to determine the taxable gains and calculate the tax payable in the RPGT Return Form and make the RPGT payment within the prescribed period. No assessment notice will be issued as the RPGT Return Form submitted to the Director General of Inland Revenue (KPHDN) will be treated as the assessment notice.
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