Legal costs – what are the costs involved in respect of Real Property Gains Tax (RPGT)?



Real Property Gains Tax (RPGT) is tax charged on gains arising from the disposal/ sale of real properties.

With effect from 1 January 2012, RPGT will be imposed at the effective rate of 10% on gains arising from the disposal of real properties within 2 years from the date of acquisition, for Sales & Purchase Agreement signed on or after that date.

The 5% rate will continue to apply for people selling in the third year through to the fifth year.

Calculation of RPGT

The calculation of RPGT is a follows; assuming that the property was purchased at RM400,000 and resold at RM500,000 within the first 2 years of its purchase;

Gain from disposal – waived exemption = Taxable gain

Eg. RM100,000 – RM90,000 = RM90,000

Chargeable RPGT is 10% of RM90,000 = RM9,000


Allowable loss

Allowable loss is a loss incurred after a property disposal and in this event tax relief is allowed under the following conditions:

  1. The disposal price is less than the earlier purchased price
  2. The disposal price is equal to the earlier purchased price.


Disposals not liable to RPGT

  • Disposal made after 5 years from the date of acquisition of the property
  • Gains on disposal
  • Gifts/ transfer of real property between:
    • Husband and wife
    • Parent and child
    • Grandparent and grandchild
  • Gains on disposal of residential property once in-a-lifetime for Malaysian citizen or permanent resident of Malaysia (Application for exemption must be made by filling up a Form under Section 8, RPGT Act 1976)


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