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RPGT Malaysia — Real Property Gains Tax — is the tax every Malaysian property seller must understand before signing any Sale and Purchase Agreement. Whether you are a Malaysian citizen planning to sell your home, a company disposing of commercial premises, or a foreign investor calculating your net proceeds, the amount you pay in RPGT Malaysia can range from zero to 30% of your gain, depending on how long you held the property and your taxpayer category. Two major changes now apply in 2026: the mandatory self-assessment system introduced in January 2025 means RPGT Malaysia calculations are entirely your responsibility — LHDN no longer issues assessment notices — and e-filing via the MyTax e-CKHT platform is compulsory for all disposals. This guide gives you every rate, every exemption, the correct calculation formula, and the exact filing steps so your RPGT Malaysia obligations are never a surprise.
What Is RPGT Malaysia and When Does It Apply?
RPGT Malaysia (Real Property Gains Tax) is a tax imposed on the profit — the chargeable gain — you earn when disposing of real property or shares in a Real Property Company (RPC) situated in Malaysia. It is governed by the Real Property Gains Tax Act 1976 (RPGTA) and administered by LHDN (Lembaga Hasil Dalam Negeri).
The key phrase in RPGT Malaysia is "chargeable gain" — if your disposal price is lower than your acquisition price (i.e., you sold at a loss), no RPGT Malaysia is payable. The tax only applies to profits from disposal, not to the transaction amount itself. This is a frequently misunderstood aspect of RPGT Malaysia.
RPGT Malaysia applies to the disposal of:
- Residential property (houses, condominiums, apartments, terrace houses)
- Commercial property (shophouses, office buildings, warehouses)
- Industrial property
- Vacant land and agricultural land
- Shares in a Real Property Company (RPC) — a company where 75% or more of its total tangible assets consist of real property in Malaysia — when disposed of by individuals
RPGT Malaysia Rates 2026 — The Three Taxpayer Categories
The RPGT Malaysia rate depends on two factors: your taxpayer category (Part I, II, or III under Schedule 5 of the RPGTA) and how long you held the property. The rates are unchanged for 2026 — the last substantive change was effective 1 January 2022 when citizens and PRs were granted full RPGT Malaysia exemption from Year 6 onwards.
Part I — Malaysian Citizens & Permanent Residents (Individuals)
| Year of Disposal (from acquisition date) | RPGT Malaysia Rate |
|---|---|
| Year 1 (within 1 year) | 30% |
| Year 2 | 30% |
| Year 3 | 30% |
| Year 4 | 20% |
| Year 5 | 15% |
| Year 6 and beyond | 0% — EXEMPT |
| The 0% RPGT Malaysia rate for citizens/PRs from Year 6 has been in effect since 1 January 2022. Source: Schedule 5, RPGT Act 1976 — LHDN official rates page. | |
Part II — Companies Incorporated in Malaysia, Trustees & Bodies of Persons
| Year of Disposal | RPGT Malaysia Rate |
|---|---|
| Year 1 | 30% |
| Year 2 | 30% |
| Year 3 | 30% |
| Year 4 | 20% |
| Year 5 | 15% |
| Year 6 and beyond | 10% |
Part III — Non-Citizens, Non-PRs & Foreign Companies
| Year of Disposal | RPGT Malaysia Rate |
|---|---|
| Year 1 | 30% |
| Year 2 | 30% |
| Year 3 | 30% |
| Year 4 | 30% |
| Year 5 | 30% |
| Year 6 and beyond | 10% |
| Foreigners and foreign companies never enjoy the 0% RPGT Malaysia exemption available to citizens and PRs. The minimum RPGT Malaysia rate for non-citizens/non-PRs on any disposal (including properties held for decades) is 10%. | |
How to Calculate Your RPGT Malaysia Liability — Step by Step
Under the RPGT Malaysia self-assessment system (in force since January 2025), every seller must compute their own tax. The calculation follows a three-step formula:
Step 1 — Calculate Chargeable Gain:
Chargeable Gain = Disposal Price − (Acquisition Price + Allowable Expenses)
Step 2 — Apply Exemptions to Get Net Chargeable Gain:
Net Chargeable Gain = Chargeable Gain − Applicable RPGT Malaysia Exemptions
Step 3 — Calculate RPGT Payable:
RPGT Malaysia Payable = Net Chargeable Gain × Applicable Rate (from Schedule 5)
Allowable Expenses (Reduce Your RPGT Malaysia Chargeable Gain)
These costs can be deducted from the disposal price when computing your RPGT Malaysia chargeable gain:
- Original acquisition price (purchase price + stamp duty + legal fees paid on purchase)
- Renovation and improvement costs — must have official receipts from licensed contractors. LHDN rejects unverified handwritten renovation claims during RPGT Malaysia assessments.
- Real estate agent commission paid on the original purchase
- Other incidental costs directly related to the acquisition
- Agent commission on disposal
- Legal fees on disposal
- Insurance money or compensation received (deducted from gain, not added)
Worked Calculation Examples — RPGT Malaysia 2026
Example 1: Malaysian Citizen — Sells in Year 3 (30% RPGT Malaysia)
🏠 Purchased Jan 2023 for RM500,000, sold Feb 2026 for RM680,000 (Year 3)
Example 2: Same Citizen — Waits Until Year 6 (0% RPGT Malaysia)
🏠 Same property sold in Jan 2029 for RM720,000 (Year 6 — citizen/PR)
Example 3: Foreign Investor — Sells After 8 Years (10% RPGT Malaysia)
🌍 Foreign investor, purchased 2016 for RM800,000, sold 2026 for RM1,150,000 (Year 10)
RPGT Malaysia Exemptions — Reduce or Eliminate Your Tax
The RPGTA provides several exemptions that can significantly reduce or completely eliminate your RPGT Malaysia liability. Understanding which exemptions apply to your specific disposal is one of the most important aspects of RPGT Malaysia tax planning.
✅ Individual Per-Disposal Exemption
Every individual is entitled to an exemption of RM10,000 or 10% of the chargeable gain, whichever is higher, on each property disposal. Applies to both full and partial sales. This reduces the net chargeable gain subject to RPGT Malaysia on every transaction.
✅ Once-in-a-Lifetime Private Residence Exemption
Malaysian citizens and PRs can claim a full exemption on the gain from one private residence disposal in their lifetime — eliminating RPGT Malaysia on that transaction entirely. Claim using CKHT 1A (Lampiran 3) with supporting ownership and occupancy documentation. Can only be used once.
✅ Six-Year Exemption (Citizens & PRs Only)
Malaysian citizens and PRs are completely exempt from RPGT Malaysia on any property held for 6 years or more from the acquisition date. This is the most powerful and widely applicable RPGT Malaysia tax planning tool available to Malaysians. Note: foreigners and companies remain taxable at 10% after 6 years.
✅ Family Transfer Exemption
Transfers of real property between spouses, parents and children, and grandparents and grandchildren are treated as no-gain, no-loss transactions — meaning no RPGT Malaysia arises. The transferor must be a Malaysian citizen. Filed using CKHT 3 exemption form.
✅ Small Property Disposal Exemption
Certain low-value property disposals below prescribed thresholds may qualify for RPGT Malaysia exemption. Consult a licensed tax firm in Malaysia to determine applicability for your specific transaction.
✅ Government-Approved Transfers
Property transfers pursuant to an approved Syariah financing scheme, securitisation of assets approved by BNM or SC, gifts to the government, and transfers within group companies with DGIR approval are all treated as no-gain transactions for RPGT Malaysia purposes.
RPGT Malaysia Self-Assessment System — What Changed in 2025 and 2026
The most significant procedural change to RPGT Malaysia compliance in recent years took effect on 1 January 2025: the transition to a comprehensive Self-Assessment System (SAS) for RPGT.
Under the previous RPGT Malaysia system, LHDN would review the submitted CKHT forms and issue an official assessment notice specifying the tax payable. Taxpayers could then pay based on LHDN's assessment. Under the SAS, this process is reversed: taxpayers must now compute their own RPGT Malaysia liability, submit the CKHT return with the computed amount, and pay within the stipulated deadline. The submitted return is deemed an assessment by the Director General of Inland Revenue — no separate assessment notice is issued.
This shift places full responsibility for accurate RPGT Malaysia computation on the disposer. Errors in calculation — whether intentional or accidental — are entirely the taxpayer's liability, subject to audit and penalties.
Budget 2026 Update — Retention Sum Self-Assessment Option
Effective 1 January 2026, Budget 2026 introduced an additional option for the retention sum calculation. Previously, the acquirer was required to retain a fixed percentage of the disposal price (3%, 5%, or 7% depending on the disposer's category). From 2026, the acquirer may alternatively retain the amount based on the self-assessed RPGT Malaysia payable as computed by the disposer — if that amount is available at the time of signing. This provides flexibility where the disposer's actual RPGT Malaysia liability is lower than the standard percentage retention.
Retention Sum — The Buyer's RPGT Malaysia Obligation
The RPGT Malaysia retention sum is a mechanism that makes the buyer responsible for deducting a portion of the purchase price and remitting it directly to LHDN as an advance RPGT Malaysia payment on behalf of the seller. This ensures LHDN collects at least a minimum payment regardless of whether the seller files correctly.
| Disposer Category | Retention Sum (% of Disposal Price) | 2026 Alternative |
|---|---|---|
| Malaysian citizen or PR (Part I) | 3% | May use self-assessed RPGT amount instead (Budget 2026, from 1 Jan 2026) |
| Company incorporated in Malaysia, trustee, body of persons (Part II) | 5% | |
| Non-citizen, non-PR, foreign company (Part III) | 7% | |
| The retention sum must be remitted to LHDN within 60 days of the disposal date. The buyer uses Form CKHT 2A to submit and pay the retention sum via the MyTax portal. If the actual RPGT Malaysia payable is less than the retention sum, LHDN will refund the difference after the filing is processed. | ||
Need Help With Your RPGT Malaysia Calculation?
KC Group's licensed tax professionals handle RPGT Malaysia assessments, exemption claims, e-CKHT filings, and tax planning for property disposals — for individuals and companies.
How to File RPGT Malaysia — e-CKHT Step-by-Step
From January 2025, all RPGT Malaysia returns must be filed electronically via the e-CKHT platform on the MyTax portal. Both the seller (disposer) and the buyer (acquirer) have separate CKHT obligations for every transaction.
Identify the Disposal Date
The RPGT Malaysia disposal date is typically the date the Sale and Purchase Agreement (SPA) is signed. If there is no written agreement, it is the date full payment is received or ownership is transferred. This date triggers the 60-day filing clock for both buyer and seller.
Gather All Supporting Documents
Compile: the SPA, original purchase agreement, title deed, renovation receipts from licensed contractors, legal fee invoices, agent commission receipts, and market valuation (if property acquired before 2000). Accurate documentation is critical under the self-assessment RPGT Malaysia system.
Compute Your RPGT Malaysia Liability
Using the three-step formula: Chargeable Gain → Net Chargeable Gain (after exemptions) → RPGT Malaysia Payable (applying the correct Schedule 5 rate). Confirm your holding period precisely — being in Year 5 vs Year 6 at time of disposal can mean the difference between 15% tax and 0% for citizens.
Seller Files CKHT 1A (Disposal Form) via e-CKHT
Log in to LHDN MyTax, navigate to e-CKHT, and complete Form CKHT 1A — the disposer's declaration. Enter the computed RPGT Malaysia liability, all deductible expenses, and any exemptions being claimed. If claiming an exemption, attach CKHT 3 (exemption form) with supporting documentation.
Buyer Files CKHT 2A and Remits Retention Sum
The buyer must also file Form CKHT 2A via e-CKHT and remit the retention sum (3%, 5%, or 7% of disposal price, or the self-assessed RPGT Malaysia amount under the Budget 2026 option) to LHDN. Both the seller and buyer CKHT submissions and the retention payment must be completed within 60 days of the disposal date.
Pay Any RPGT Malaysia Balance or Receive Refund
If the actual RPGT Malaysia payable is less than the retention sum remitted by the buyer, LHDN processes a refund. If more is owed, the seller must pay the balance. Under the self-assessment system, the submitted return is immediately treated as the final assessment — no separate LHDN notice is issued.
Penalties for Late or Incorrect RPGT Malaysia Filing
| Offence | Penalty | Legal Basis |
|---|---|---|
| Late filing of CKHT forms (after 60-day deadline) | Fine up to RM10,000 or imprisonment up to 1 year, or both | Section 29 RPGTA 1976 |
| Under-declaration of RPGT Malaysia chargeable gain | Penalty up to 45% of tax undercharged + backpayment of full tax | Section 29A RPGTA 1976 |
| Buyer fails to retain / remit retention sum | Buyer becomes personally liable for the full retention sum amount that should have been withheld | Section 21B RPGTA 1976 |
| Incorrect RPGT Malaysia return | LHDN audit with additional assessments; SAS means LHDN can reopen any return within the audit window | RPGTA 1976 |
Frequently Asked Questions — RPGT Malaysia 2026
What is RPGT Malaysia and who must pay it?
RPGT Malaysia (Real Property Gains Tax) is a tax on the profit earned from selling real property in Malaysia. It applies to every person — Malaysian citizens, PRs, companies, and foreigners — who disposes of real property or RPC shares at a profit. The tax only applies if you make a gain; if you sell at a loss, no RPGT Malaysia is payable. The rate depends on how long you held the property and your taxpayer category. Malaysian citizens and PRs who have held property for 6 years or more are fully exempt from RPGT Malaysia — one of the most beneficial tax provisions in Malaysian property law.
What is the RPGT Malaysia rate in 2026?
The RPGT Malaysia rates in 2026 are unchanged from the last revision in January 2022. For Malaysian citizens and PRs: 30% in Years 1–3, 20% in Year 4, 15% in Year 5, and 0% from Year 6 onwards. For Malaysian-incorporated companies: 30% in Years 1–3, 20% in Year 4, 15% in Year 5, and 10% from Year 6 onwards. For foreigners and non-PRs: a flat 30% in Years 1–5 and 10% from Year 6 onwards — foreigners never qualify for the 0% RPGT Malaysia exemption.
How does the RPGT Malaysia 6-year exemption work?
Malaysian citizens and permanent residents are completely exempt from RPGT Malaysia on any property sold after holding it for 6 years or more from the acquisition date. This exemption has been in force since 1 January 2022. The holding period is calculated from the date of acquisition to the date of disposal — typically the SPA signing date. Selling even one day before the 6-year anniversary places you in Year 5 and subjects you to 15% RPGT Malaysia. Precise timing matters enormously for RPGT Malaysia planning.
What changed with RPGT Malaysia in 2025 and 2026?
Two major changes affect RPGT Malaysia compliance in 2025–2026. First, from 1 January 2025, RPGT Malaysia moved to a self-assessment system — sellers must now compute their own tax, and the submitted return is the final assessment without LHDN issuing a separate notice. Second, all RPGT Malaysia returns must now be filed electronically via e-CKHT on the MyTax portal — manual filings are no longer accepted. Budget 2026 additionally introduced the option for buyers to use the seller's self-assessed RPGT Malaysia amount as the retention sum (instead of the fixed 3%/5%/7% percentage), effective 1 January 2026.
Can I reduce my RPGT Malaysia with renovation costs?
Yes. Renovation and improvement costs are deductible from your disposal price when computing your RPGT Malaysia chargeable gain — effectively reducing the taxable profit. However, LHDN requires official invoices and receipts from licensed contractors. Handwritten notes or informal payments to unlicensed workers do not qualify as deductible expenses for RPGT Malaysia purposes. Keep all renovation receipts from the date you purchased the property — they remain relevant for RPGT Malaysia purposes even decades later. A professional tax firm can help you maximise your allowable deductions.
What is the RPGT Malaysia filing deadline?
Both the seller (disposer) and buyer (acquirer) must file their respective CKHT forms within 60 days of the disposal date — typically the SPA signing date. The seller files CKHT 1A with the computed RPGT Malaysia liability; the buyer files CKHT 2A and remits the retention sum (3%, 5%, or 7% of the disposal price, or the self-assessed amount) to LHDN within the same 60-day window. Late filing can result in fines up to RM10,000. All filings must be done electronically via e-CKHT at LHDN MyTax.
Final Word: Plan Your RPGT Malaysia Before You Sign the SPA
RPGT Malaysia is one of those taxes where the planning value is enormous and the cost of ignorance is real. The difference between 0% and 30% on your property gain — purely based on holding period — represents one of the most significant tax planning opportunities available to any Malaysian property owner. For citizens and PRs, the six-year exemption from RPGT Malaysia is unambiguously the most powerful tax benefit in Malaysian property law.
The self-assessment system introduced in 2025 has made RPGT Malaysia compliance more demanding — you must compute the correct figures, file via e-CKHT within 60 days, and ensure every deduction and exemption is properly documented. Errors do not get caught by LHDN at the time of filing; they are found during audits, when penalties are already compounding.
Whether you are selling your first home and wondering whether the once-in-a-lifetime exemption applies, a property investor optimising your disposal timeline around the 6-year mark, or a company disposing of commercial premises and calculating the 10% long-term rate, getting RPGT Malaysia right requires the same thing: accurate records, the right calculation, and a filed return within 60 days.
RPGT Malaysia — Calculated Correctly, Filed On Time
KC Group · Licensed tax firm Malaysia · RPGT assessment · e-CKHT filing · Exemption claims · Property tax planning
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