Real Property Gains Tax (RPGT) — known in Bahasa Malaysia as Cukai Keuntungan Harta Tanah (CKHT) — is a capital gains tax administered by the Inland Revenue Board (LHDN) on profits made from disposing of real property or shares in a Real Property Company (RPC) in Malaysia.
If you sell your property at a profit, RPGT applies to the chargeable gain (not the total sale price). The tax rate depends on how long you held the property and your citizenship category.
| Holding Period | Malaysian Citizen & PR | Local Company | Foreigner |
|---|---|---|---|
| Year 1 – 3 | 30% | 30% | 30% |
| Year 4 | 20% | 20% | 30% |
| Year 5 | 15% | 15% | 30% |
| Year 6 onwards | 0% | 10% | 10% |
Source: LHDN Real Property Gains Tax Act 1976 (Finance Act amendment 2022, applicable for 2026).
The holding period starts from the date of the Sale and Purchase Agreement (SPA) of the original purchase, and ends on the date of the SPA of disposal. It is not based on the date of title transfer (MOT).
Malaysian Citizens and PRs are entitled to a statutory exemption on each disposal:
This means even if your gain is RM50,000, your first RM5,000 (10%) is exempt, and the remaining RM45,000 is subject to tax. If the gain is RM8,000, the full RM8,000 is covered (since RM10,000 floor applies).
Additionally, citizens are entitled to a once-in-a-lifetime full exemption on the disposal of one private residence (Section 8, RPGT Act 1976). This must be applied for via LHDN.
You can deduct the following from your disposal proceeds to reduce your chargeable gain:
Acquisition Costs
Disposal Expenses
Note: Routine maintenance, repairs, and furnishings are NOT deductible — only capital improvements that increase the property's value qualify.
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This guide is for informational purposes only. KiraSmart is not financial, tax, or professional advice. Please verify with official sources.
Last reviewed: 2026-07-17