Real Property Gains Tax (RPGT)
(June 24th, 2009)GOOD NEWS ! RPGT was exempted.
THE Real Property Gains Tax Act 1976 (RPGTA) has not been abolished but exempted with effect from 1 April 2007. Effectively, the Government has exempted all persons from the provisions of the RPGTA on assets disposed after March 31, 2007. ¡°Person¡± includes a company, a partnership, a body of persons, an executor of an estate and a corporation sole.
Therefore, all disposals occurring from April 1, 2007 will not only be exempted from the property gains tax but they are no longer required to file the forms referred to as CKHT 1 and 2 for any sale and purchase of property.
Capital gains are generally not subject to tax in Malaysia. Real property gains tax is charged on gains arising from the disposal of real property situated in Malaysia or of interest, options or other rights in or over such land as well as the disposal of shares in real property companies. The tax rates for Malaysian citizens and permanent residents are as follows:
| |
Company |
Individual |
| Disposal within 2 years |
30% |
30% |
| Disposal in the 3rd year |
20% |
20% |
| Disposal in the 4th year |
15% |
15% |
| Disposal in the 5th year |
5% |
5% |
| Disposal in the 6th year and thereafter |
5% |
NIL |
Citizens and permanent residents also enjoy an exemption of RM5,000 or 10% of the gains whichever is the greater, besides a one-time tax exemption on the gains arising from the disposal of one private residence.
For non-citizens and non-permanent resident individuals, gains from the disposal of real property within five years are taxed at a flat rate of 30%, after which the tax rate will be 5%.
Real Property Gains
Real property gains are gains derived from disposal, sell, convey, assign, transfer, settle or alienate whether by agreement or by force of law which fall under chargeable asset. All chargeable assets must be made during the year of assessment and all particulars must be furnished as requested.
Chargeable Assets
An Act enacted by the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong as the Real Property Gain Tax Act 1976. Interpreted chargeable asset as real property gain tax, shall be charged in accordance to this Real Property Gain Tax Act 1976 in respect of chargeable gain accruing on the disposal of any real property. Subject to this Act, the chargeable gain from disposal of real property shall be charged according to the category Tax Rates in Ringgit Malaysia.
Allowable Loss
Allowable loss means a loss made after the disposal. Tax relief shall be allowed in respect of the following accrued:
1. If the disposal price is less than the acquisition price.
2. If the disposal price is equal to the acquisition price.
Exemption
The following disposal of real property which do not fall under Real Property tax Act 1976 :
1. Transferring ownership from husband to wife (wives) or vice versa
2. Inheritance of real property from deceased
3. Transfer of ownership from an individual to a company where he or she has shares in the company.
4. Transfer of an asset as collateral for loan.
5. Compulsory acquisition by Government under any law. (Eminent Domain)
6. Disposal of assets as charity.
Useful links:
http://www.hasilnet.org.my/english/eng_NO2_1_3.asp
http://www.kpmg.com.my/kpmg/publications/tax/42/a0169.htm
http://www.jpph.gov.my/bickhtb.htm