Real Property Gains Tax (RPGT) Malaysia: 2026 rates, exemptions and investor guide

Real Property Gains Tax, or RPGT, is charged on gains arising from the disposal of chargeable assets in Malaysia. It is not calculated on the gross selling price. The tax is based on the disposal price after allowable costs, less the acquisition price, applicable exemptions and allowable losses.

For a Malaysian citizen or permanent resident, the difference between selling in the fifth year and the sixth year can be substantial: the applicable RPGT rate falls from 15% to 0%. Companies incorporated in Malaysia and foreign disposers generally remain subject to a 10% rate from the sixth year onwards.

RPGT also affects cash flow before the final tax is settled. The buyer may have to retain and remit 3%, 5% or 7% of the gross consideration to HASiL, while the seller remains responsible for calculating the actual tax, filing through e-CKHT and paying any balance by the statutory deadline.

Malaysia recorded 416,413 property transactions worth RM241.87 billion in 2025, according to the National Property Information Centre (NAPIC). Residential property accounted for 256,512 transactions worth RM108.27 billion. For owners and investors planning an exit, the relevant figure is not merely the headline sale price, but the cash left after loan redemption, transaction costs and tax.

Important: This guide provides general information and does not replace advice from a licensed tax agent, lawyer or other qualified professional. RPGT treatment can change according to the transaction documents, ownership structure and facts of the disposal.

RPGT at a glance

What is Real Property Gains Tax in Malaysia?

RPGT is administered by the Inland Revenue Board of Malaysia, or HASiL, under the Real Property Gains Tax Act 1976. It applies to gains from disposing of a chargeable asset, which principally includes real property situated in Malaysia and certain shares in a real property company.

The year of assessment follows the calendar year in which the disposal takes place. RPGT is separate from stamp duty, quit rent, assessment tax and income tax on rental income. Paying one of these does not remove the obligation to consider the others.

What assets are subject to RPGT?

RPGT versus income tax: when a property sale may be business income

RPGT generally applies where the property is held as a capital asset. A gain may instead be taxed under the Income Tax Act 1967 when the facts indicate that the seller is carrying on a property-trading or development business.

There is no simple rule stating that a particular number of sales automatically turns an investor into a property trader. Factors can include:

• the seller's intention when the property was acquired;
• the frequency and pattern of transactions;
• the length of the holding period;
• the way the purchase was financed;
• renovation, subdivision, conversion or development activity;
• the seller's ordinary business; and
• whether the transaction resembles an organised profit-making scheme.

HASiL states that a disposer is exempt from submitting an RPGT return where the gain is taxable under the Income Tax Act (for example, the sale of business stock by a property developer). Investors who flip properties repeatedly or develop land should not assume that RPGT will always be the applicable regime.

RPGT versus stamp duty

RPGT rates in Malaysia for 2026

The applicable rate depends on the disposer's category and how long the asset has been held. The current rates are set out by HASiL under Schedule 5 of the RPGT Act.

Part I covers any disposer who does not fall under Part II or Part III, including a Malaysian citizen and a partnership. Part II includes a company incorporated in Malaysia, a trustee of a trust and a body of persons registered under written law in Malaysia. Part III includes a non-citizen who is not a permanent resident and a company not incorporated in Malaysia.

The 0% rate for a Malaysian citizen or permanent resident from the sixth year onwards does not automatically remove the filing obligation. The disposal must still be reported through the applicable e-CKHT process unless a specific filing exclusion applies.

RPGT rate matrix showing the tax rate by disposer category and holding year

How the holding period is counted

The RPGT rate is based on the statutory acquisition and disposal dates, not the date vacant possession is delivered or the date the sale proceeds finally arrive.

According to HASiL's disposal-date and acquisition-date rules:

• where there is a written agreement, the disposal date is generally the agreement date;
• where there is no written agreement, the disposal date is the earlier of the date ownership is transferred or the date the disposer receives the whole consideration; and
• the buyer's acquisition date is deemed to coincide with the seller's disposal date.

This makes the signing date important. A disposal shortly before or after a holding-period anniversary can fall into a different rate band.

Holding-period examples

A Malaysian individual buys a property on 15 March 2023 and signs the disposal agreement on 14 March 2026. The property has not been held for three complete years, so the disposal remains within the first three-year period and the 30% rate applies.

If the same owner sells in the fourth year, the rate is 20%. If the owner sells in the sixth year or later, the rate is 0%, although the e-CKHT reporting requirements still need to be completed.

How to calculate RPGT in Malaysia

RPGT is calculated in several stages. The seller first determines the disposal price and acquisition price, then calculates the gain, applies the individual exemption where available, deducts allowable losses and multiplies the remaining chargeable gain by the applicable rate.

Disposal consideration

– allowable disposal expenses

= disposal price

Acquisition consideration

+ allowable incidental acquisition costs

– specified compensation, insurance recoveries and forfeited deposits

= acquisition price

Disposal price

– acquisition price

= gain or allowable loss

Gain

– individual exemption, where applicable

– available allowable losses

= chargeable gain

Chargeable gain × applicable RPGT rate

= RPGT payable

HASiL's official computation sequence applies the individual exemption before unabsorbed allowable losses.

Flow diagram showing how RPGT is calculated from sale consideration to final tax payable

What can form part of the acquisition price?

The acquisition price starts with the consideration paid to acquire the asset and includes qualifying incidental acquisition costs.

HASiL defines incidental acquisition costs as qualifying fees, commissions or remuneration paid for professional services such as those provided by a surveyor, valuer, agent, accountant or legal adviser. The expenditure must be connected to acquiring the asset.

What can reduce the disposal price?

Under HASiL's disposal-price and acquisition-price guidance, allowable disposal expenses can include:

1. expenditure incurred after acquisition to enhance or preserve the value of the asset, where that value is still reflected at the time of disposal;
2. expenditure to establish, preserve or defend the seller's title or rights over the asset; and
3. incidental disposal costs, including qualifying professional fees and commissions paid to a surveyor, valuer, accountant, agent or legal adviser.

A renovation invoice is not automatically deductible. The seller should be able to show that the expenditure was wholly and exclusively incurred on the asset, met the statutory test and remained reflected in the asset when it was sold.

For example, a documented kitchen extension that remains part of the property may qualify as value-enhancing expenditure. Routine repairs, replacing worn furniture or paying ordinary maintenance charges will not necessarily meet the same test.

Costs that are not automatically deductible

HASiL specifically excludes interest paid on capital used to acquire the asset and fees paid to complete and submit the RPGT return. It also prevents expenses that are deductible in calculating adjusted income or loss under the Income Tax Act from being counted again for RPGT.

Two-column comparison of allowable RPGT costs against costs that are not allowable

Worked RPGT calculation for an individual investor

Assume a Malaysian individual disposes of a property in the fourth year.

The buyer's standard retention for a Part I disposer is 3% of the RM700,000 consideration, or RM21,000. That amount is credited against the seller's actual tax liability. It is not the final RPGT.

In this example, the seller's estimated RPGT is RM21,600, leaving an estimated RM600 balance to be paid after taking the RM21,000 remittance into account.

Selling in year 5 versus year 6

Using the same RM108,000 chargeable gain:

Waiting until the sixth year would save RM16,200 in this simplified example. That does not automatically make waiting the better investment decision. The owner should also consider:

• additional mortgage interest;
• maintenance, assessment tax and quit rent;
• vacancy or tenant risk;
• the expected sale price one year later;
• liquidity and completion certainty; and
• the return that could have been earned by redeploying the capital elsewhere.

RPGT should be included in a total-return calculation, not assessed in isolation.

Comparison chart showing the tradeoffs of selling now versus holding to the sixth year

RPGT exemptions and no-gain-no-loss transactions

Malaysia's RPGT rules provide several exemptions and deemed no-gain-no-loss treatments. They do not apply to every transfer, and the conditions should be checked before the agreement or transfer documents are executed.

Individual exemption: RM10,000 or 10% of the gain

An individual may deduct the higher of:

• RM10,000; or
• 10% of the gain before the exemption.

For a partial disposal, the RM10,000 amount is apportioned according to the statutory formula. Companies do not qualify for this individual exemption. HASiL sets out the calculation on its RPGT exemption page.

Once-in-a-lifetime private residence exemption

A Malaysian citizen or permanent resident may elect for a full exemption on the gain from disposing of one qualifying private residence in Malaysia.

HASiL defines a private residence as a building or part of a building owned by an individual and occupied, or certified fit for occupation, as a place of residence. The election is made electronically using CKHT 3 through e-CKHT and is irrevocable.

This makes the decision valuable. An owner with more than one qualifying residence should compare the current taxable gain with the potential gain on another residence before using the exemption. Applying it to a small gain may leave a much larger future gain exposed to RPGT.

Gifts between specified family members

A gift is generally treated as a disposal at market value. However, HASiL provides no-gain-no-loss treatment for a gift between:

• husband and wife;
• parent and child; or
• grandparent and grandchild.

The donor must be a Malaysian citizen to qualify. The treatment applies to a gift made for love and affection; it should not be described as a blanket exemption for every sale or transfer between relatives.

The recipient does not necessarily receive a fresh market-value acquisition cost for a later disposal. The future RPGT position should be checked before the property is transferred.

Transfers between spouses and former spouses

HASiL separately recognises no-gain-no-loss treatment for certain transfers between spouses for consideration, subject to the statutory residence and citizenship conditions. A transfer between former spouses under a court order following the dissolution or annulment of the marriage can also qualify where the transferor meets the citizenship condition.

Inherited property

The devolution of a deceased person's property to an executor or legatee is generally treated as no gain and no loss. This does not mean the beneficiary can later sell the property without RPGT.

HASiL's inherited-property guidance states that:

• the executor generally acquires the property on the date of death at its market value at that date, after the statutory adjustments;
• a beneficiary's acquisition date can be the date the property is transferred to the beneficiary; and
• the beneficiary's acquisition price may be based on market value at the date of transfer, depending on the nature of the entitlement.

A valuation obtained at the relevant date can therefore be important years later. Keep the probate, letters of administration, distribution documents, transfer records and valuation report.

Other no-gain-no-loss transactions

Other transactions that can receive special treatment include:

• compulsory acquisition under written law;
• gifts to the Federal Government, a State Government, a local authority or a qualifying tax-exempt charity;
• certain transfers to a Malaysian-incorporated company controlled by the individual or specified connected persons, where the ownership, control and share-consideration conditions are met; and
• certain court-ordered transfers between former spouses.

For a transfer to a controlled company, HASiL states that the consideration must be entirely in shares or at least 75% in shares, with the balance paid in money. The transaction should be reviewed professionally because the shares received can themselves become chargeable assets.

Temporary RPGT exemption orders introduced for earlier periods should not be presented as standing relief for a 2026 disposal.

Buyer retention: why 3%, 5% or 7% may be withheld

The buyer's retention is a tax-collection mechanism. It is calculated by reference to the gross consideration, while the seller's final RPGT is calculated from the chargeable gain. The two amounts can be very different.

Standard buyer retention rates

Under the section 21B retention rules, the buyer generally retains and remits the lower of:

• the whole cash consideration; or
• the applicable 3%, 5% or 7% of the total consideration.

The remittance is generally due within 60 days from the disposal date. It is credited against the tax imposed on the seller. Where the transaction does not involve monetary consideration, section 21B does not apply.

Diagram comparing the buyer's retention percentage against the seller's actual RPGT liability

Additional option from YA 2026

For disposals from YA 2026, the buyer has an additional option to remit the amount of RPGT deemed assessed, where the buyer receives the statutory notification from the seller before the remittance is made.

The buyer therefore chooses the lowest applicable amount among:

1. the whole cash consideration;
2. 3%, 5% or 7% of the total consideration; or
3. the amount of tax deemed assessed.

This change was enacted through the Finance Act 2025. It can reduce excessive withholding where the actual tax is materially below the standard percentage of the gross price.

The deemed-assessment option should be implemented through the formal e-CKHT process. A buyer should not substitute an informal estimate or message from the seller for the required notification.

Buyer-retention example

A Malaysian individual sells a property for RM1 million. The standard Part I retention is RM30,000.

If the seller's properly filed deemed assessment is RM8,000 and the buyer receives the statutory notification before remitting the retention, the buyer may use the lower deemed-assessment amount where all requirements are met. This improves the seller's completion cash flow compared with remitting RM30,000 and waiting for the excess to be refunded or applied.

RPGT self-assessment, forms and deadlines

Malaysia introduced the RPGT Self-Assessment System for disposals from 1 January 2025. Under the system, the seller calculates the gain and RPGT in the return instead of waiting for HASiL to determine the initial amount.

The submitted RPGT return is treated as the notice of assessment. HASiL does not issue a separate assessment notice for the self-assessed amount.

Which CKHT form applies?

From 1 January 2025, e-CKHT filing through MyTax is mandatory, including for relevant earlier-year transactions filed after that date. HASiL states that a paper return is not accepted and can be treated as a failure to file unless the return is resubmitted through e-CKHT.

A separate form should generally be completed for each disposer and each acquirer.

RPGT filing and payment timeline

HASiL's seller-and-buyer responsibility guidance confirms the 60-day filing period and 90-day seller payment period for disposals from YA 2025 onwards.

If a return is filed late, the seven-year record-retention period begins from the end of the year in which the late return is submitted.

Timeline showing the 60-day filing deadline and 90-day payment deadline for sellers and buyers

Can RPGT be paid by instalments?

From 1 January 2026, the Director General of Inland Revenue may allow tax payable under a deemed assessment to be paid by instalments. The power is discretionary. It is not an automatic extension or instalment plan available to every seller.

A seller who cannot meet the payment date should apply promptly and should not assume that submitting an application suspends the statutory deadline unless HASiL confirms the arrangement.

Documents property investors should retain

Keep a digital file from the date the property is acquired. It should include:

• the acquisition and disposal agreements;
• proof of the acquisition and disposal dates;
• legal, agent, valuation, surveyor and other professional invoices;
• stamp-duty evidence;
• renovation contracts, itemised invoices, photographs and proof of payment;
• evidence that claimed enhancements remained reflected in the asset at disposal;
• compensation, insurance and forfeited-deposit records;
• loan-redemption statements, kept separate from the RPGT cost computation;
• e-CKHT submission confirmations, bill numbers and payment receipts; and
• probate, administration, distribution and valuation documents for inherited property.

Allowable RPGT losses from YA 2026

An allowable loss arises where the disposal price is lower than the acquisition price, subject to the RPGT rules. It can generally be deducted against chargeable gains from other disposals.

The Finance Act 2025 introduced a time limit for losses from YA 2026 onwards. The amended law permits the balance to be used for a period of nine consecutive subsequent years of assessment. Together with the first year in which the loss becomes available for deduction, this is commonly described as a 10-year utilisation window.

Unabsorbed losses from YA 2025 and earlier receive transitional treatment: they may continue to be used from YA 2026 until YA 2035. Any balance remaining after YA 2035 is disregarded.

The timing and tracking of losses now matter more. Investors with multiple disposals should maintain a year-by-year loss schedule rather than assuming the loss remains available indefinitely.

Penalties and common compliance mistakes

Main penalties and tax increases

The official penalty framework is set out by HASiL under its RPGT penalties and increases guidance.

Common mistakes by property investors

The most frequent calculation error is applying the RPGT rate to the gross sale price. Other avoidable mistakes include:

• treating every renovation cost as deductible;
• deducting mortgage interest or loan-document costs;
• using the vacant-possession, completion or full-payment date instead of the statutory disposal date;
• assuming a 0% rate means no filing is required;
• treating the buyer's retention as the final RPGT;
• using the once-in-a-lifetime private-residence exemption without comparing future qualifying disposals;
• failing to retain documents for older properties;
• treating every family transfer as exempt;
• double-claiming an expense for both income tax and RPGT; and
• assuming repeated property trading will necessarily be taxed under RPGT rather than income tax.

What RPGT means for property investors

1. Short-term flipping faces the highest rate

Most disposers face a 30% RPGT rate within the first three years. Financing does not reduce the RPGT chargeable gain because mortgage interest is specifically excluded.

A leveraged investor should calculate three separate measures:

1. the gain before tax;
2. the gain after RPGT and transaction costs; and
3. the cash-on-cash return after financing costs.

A project can show a positive gross gain but still produce a weak net return after agent fees, legal fees, interest and RPGT.

2. The sixth-year treatment differs for individuals and companies

RPGT should not be the sole reason for choosing individual or company ownership. Financing terms, legal liability, succession planning, accounting costs and the tax treatment of rental income can outweigh a single tax-rate difference.

3. Gross selling price is not reinvestment capital

A basic completion cash-flow estimate is:

Gross selling price

– outstanding loan redemption

– buyer's RPGT retention

– agent commission

– legal and administrative costs

– seller's remaining RPGT

= estimated net cash available

This is the amount that should be used when comparing the next property purchase, debt repayment or another investment, not the headline sale price.

4. Records directly affect after-tax return

An otherwise valid deduction can be lost when the seller cannot prove the expenditure. This is especially common with older renovations paid in cash or projects where the invoice does not identify the property or work performed.

Maintain a property cost ledger with:

• transaction date;
• supplier;
• purpose;
• invoice and payment reference;
• RPGT category;
• whether the cost was claimed against rental income; and
• evidence that the work remained reflected at disposal.

5. Rental income and disposal gains are taxed separately

Rental income is generally dealt with under the Income Tax Act. RPGT applies when the capital asset is disposed of.

This distinction matters because an expense deductible in calculating rental or business income cannot also be used in the RPGT acquisition-price or disposal-price calculation, whether or not the taxpayer actually claimed it for income tax.

6. Selling later solely to reduce RPGT can backfire

A lower future RPGT rate is only one side of the decision. The investor may incur another year of interest and holding costs or lose a willing buyer. Property prices can also move against the seller.

Use an after-tax comparison:

Real property company shares: RPGT or capital gains tax?

A real property company, or RPC, is generally a controlled company whose defined value of Malaysian real property, shares in another RPC or both is at least 75% of its total tangible assets.

HASiL's RPC guidance also states that shares acquired while a company is an RPC can remain chargeable assets even if the company later ceases to meet the RPC threshold.

From 1 January 2024, paragraph 34A generally ceased to apply to acquisitions and disposals of RPC shares by:

• companies;
• limited liability partnerships;
• trust bodies; and
• co-operative societies.

Their gains can instead fall within the capital gains tax regime under the Income Tax Act. Labuan entities carrying on business under section 2B of the Labuan Business Activity Tax Act remain subject to separate RPGT treatment for RPC shares.

Individuals can continue to fall under RPGT for applicable RPC-share disposals. Losses connected with certain RPC-share transactions are also restricted. Specialist advice is sensible because the disposer type, acquisition date and company's RPC status can change the applicable regime.

How to plan a property sale before signing the SPA

Before fixing the agreement date:

1. Confirm the legal owner and RPGT disposer category.
2. Confirm the statutory acquisition date.
3. Model the proposed disposal date and applicable rate.
4. Reconstruct the acquisition price and qualifying incidental costs.
5. Review renovations and separate enhancements from routine repairs.
6. Check whether any expense was already deductible for income tax.
7. Estimate the individual exemption and available allowable losses.
8. Decide whether the private-residence exemption should be used.
9. Estimate the buyer's retention and completion cash flow.
10. Check whether the YA 2026 deemed-assessment retention option is available.
11. Prepare e-CKHT access and supporting records.
12. Obtain professional advice for inherited, gifted, jointly owned, repeatedly traded or company-held property.

Put your net property sale proceeds to work

A property sale may release a sizeable lump sum, but the amount actually available is the net proceeds after settling the outstanding loan, RPGT, buyer’s retention, agent commission, legal fees and other transaction costs. 

Before investing, separate any money needed for a replacement property, tax payments and near-term commitments from capital that can remain invested for longer-term goals.

StashAway lets investors manage both time horizons in one place. Near-term funds can be kept accessible in StashAway Simple, an ultra-low-risk cash-management portfolio with no lock-in that earns you up to 3.55% p.a. while proceeds that are not needed for several years can be invested through StashAway General Investing, which provides professionally managed, globally diversified ETF portfolios for long-term wealth building.

This allows investors to decide how much of the sale proceeds should remain liquid and how much can be invested for growth, rather than automatically concentrating the entire amount in another property.

Frequently asked questions about RPGT in Malaysia

Is there RPGT if I sell a property after five years?

A sale must fall in the sixth year or later to reach the final rate band. A Malaysian citizen or permanent resident generally faces a 0% rate at that point. A Malaysian-incorporated company and a Part III disposer generally face 10%.

Do I need to file CKHT if my RPGT rate is 0%?

Generally, yes. The 0% rate changes the amount of tax, not the reporting obligation. The seller should submit the applicable e-CKHT form within 60 days unless the disposal is within a specific filing exclusion.

Do I pay RPGT if I sell at a loss?

No RPGT is payable where there is no chargeable gain. The seller may still need to file CKHT 3. A qualifying allowable loss may be used against gains from other disposals, subject to the statutory restrictions and time limit.

Can renovation costs reduce RPGT?

Only expenditure that satisfies the RPGT test and is supported by evidence. The expenditure must generally enhance or preserve the property's value, and that value must remain reflected at disposal. Routine repairs, furnishings and unsupported cash claims are not automatically allowable.

Are legal fees and stamp duty deductible?

Qualifying legal fees and stamp duty connected with acquiring the property can form part of the acquisition price. Qualifying sale legal fees can reduce the disposal price. Loan-agreement fees, loan stamp duty and mortgage interest are financing costs and are not RPGT deductions.

Who pays RPGT: the buyer or seller?

The seller bears the RPGT liability. The buyer has a separate statutory obligation to retain and remit the required amount, which is credited against the seller's tax.

Is the buyer's 3% retention the RPGT rate?

No. The 3%, 5% or 7% retention is based on the gross consideration and is only a collection mechanism. The seller's final RPGT is calculated from the chargeable gain and applicable rate.

Can I avoid RPGT by transferring the property to a relative?

Not every family transfer qualifies. No-gain-no-loss treatment is available for qualifying gifts between spouses, parents and children, and grandparents and grandchildren where the donor is a Malaysian citizen. The recipient's future RPGT position must also be considered.

Is inherited property subject to RPGT?

The transfer from a deceased estate to an executor or beneficiary is generally no gain and no loss. A later disposal by the executor or beneficiary can be taxable, based on the applicable acquisition date, acquisition price and holding period.

Is rental income subject to RPGT?

No. Rental income is generally taxed under the Income Tax Act. RPGT applies to a gain from disposing of the capital asset.

Can a property trader be taxed under income tax instead of RPGT?

Yes. If the facts show that the person is carrying on a property-trading or development business, the gain may be taxed as business income.

Can RPGT be paid by instalments?

From 1 January 2026, the Director General may approve instalments for tax payable under a deemed assessment. Approval is discretionary and must not be assumed.

What happens if I miss the 60-day CKHT deadline?

A failure to submit CKHT 1A or CKHT 1B within 60 days, or a failure to declare a chargeable disposal, can attract a penalty of up to three times the tax charged.

Conclusion

RPGT planning starts with the correct disposer category, acquisition date and disposal date. The seller then needs to calculate the tax from the chargeable gain, not the gross selling price, and retain evidence for every acquisition, enhancement and disposal cost claimed.

For disposals from YA 2025 onwards, both parties generally file within 60 days, while the seller pays the self-assessed tax or balance within 90 days. From YA 2026, the deemed-assessment retention option, instalment power and time limit on allowable losses add further procedural considerations.

The tax saved by delaying a sale should always be measured against financing, maintenance, vacancy, market and opportunity costs. The right decision is the one that produces the stronger after-tax outcome, not simply the lowest RPGT rate.