RPGT in Malaysia
(Real Property Gains Tax) 2026

General guidance for 2026 — not legal or tax advice. Rates and rules change with each Budget; confirm current figures with LHDN, your state authority or a licensed professional. Just bought? Ask us about renovating →

Real Property Gains Tax (RPGT) is governed by the Real Property Gains Tax Act 1976 and charged by LHDN on the gain when you dispose of (sell) real property or shares in a real property company. The rate depends mainly on how long you owned the property — the longer you hold, the lower the rate. Unlike income tax, RPGT is a transactional tax: it only arises when you actually sell, so timing the disposal is a key part of managing your liability. This guide explains the rates, the exemptions, and the practical steps involved in filing so you are prepared when the time comes to sell.

RPGT rates by holding period

So a Malaysian citizen who holds a property for at least six years before selling pays no RPGT on the gain.

RPGT impact comparison: same gain, different holding periods

This comparison assumes the once-in-a-lifetime exemption has NOT been applied and uses the flat rates without the RM10,000/10% individual exemption. Actual liability may be lower — consult LHDN or a tax adviser for your transaction.

How the chargeable gain is calculated

In simple terms:

Chargeable gain = Disposal price − Acquisition price − allowable costs

Allowable deductions include legal fees, agent commission, stamp duty paid, and the cost of renovations or improvements (keep your receipts — renovation invoices can reduce your RPGT). RPGT is then the rate × the chargeable gain.

Worked example

Exemptions that save you money

• Once-in-a-lifetime exemption on the gain from disposing one private residence (Malaysian citizens).
• RM10,000 or 10% of the gain (whichever higher) exemption per disposal for individuals.
• Transfers between family — gifts between spouses, parents and children may be exempt (deemed no gain/no loss).
• Disposals under a will or intestacy (the death itself is generally not a chargeable event).

Companies & foreigners

Companies pay 10% from the 6th year (not 0%), and foreigners pay a flat 30% for the first five years and 10% thereafter. The once-in-a-lifetime residence exemption applies only to citizens. Foreign sellers need to be especially careful about the retention sum — the buyer’s lawyer withholds a percentage of the sale price to remit to LHDN pending RPGT assessment.

Filing & payment

Both buyer and seller must submit RPGT forms to LHDN (usually within 60 days of disposal). The buyer’s lawyer typically retains a portion of the price to remit RPGT on the seller’s behalf. File on time to avoid penalties. Forms required include CKHT 1A (disposal), CKHT 2A (acquisition) and CKHT 3 (exemption claim if applicable). Even if you believe your net gain is zero or your RPGT rate is 0%, you are still required to file the return forms within the 60-day period. Failure to do so can attract an administrative penalty even when no tax is actually payable. Your conveyancing lawyer or tax agent can assist with the filing if you are unfamiliar with the process.

Common mistakes sellers make

• Not keeping renovation receipts — improvement costs reduce your chargeable gain and each unreceipted ringgit of renovation becomes taxable profit. Store invoices from the day you buy.
• Missing the 60-day filing window — late returns attract a penalty surcharge on top of any tax owed. Mark the date from the date of disposal (usually the SPA date).
• Forgetting the agent commission deduction — your agent’s fee is an allowable cost; get the invoice and a receipt.
• Using the once-in-a-lifetime exemption too early — apply it to the disposal with the largest expected gain, not the first property you sell.
• Confusing disposal date — the disposal date for RPGT is generally the date the sale becomes unconditional, which may differ from the SPA signing date. Confirm with your lawyer.

How renovation reduces RPGT

Documented renovation and improvement costs are deducted from your chargeable gain. A kitchen remodel, bathroom upgrade, or full interior renovation — all with invoices — can materially lower your RPGT. This is why keeping renovation receipts is as important as keeping the SPA. The renovation must be an improvement to the property (not routine maintenance) to qualify as an allowable deduction under the RPGT Act. See renovations that add value → for which upgrades also boost the sale price. As a practical step, keep a dedicated folder — physical or digital — for all improvement invoices from the day you purchase the property.

Planning tips

• Hold for 6+ years (citizens) to drop to 0% RPGT.
• Keep renovation receipts — improvement costs reduce your chargeable gain. A documented renovation is both a value-add and a tax deduction. See renovations that add value →.
• Use your once-in-a-lifetime exemption strategically on your biggest expected gain.
• If you must sell early, maximise allowable deductions to minimise the chargeable gain.