What RPGT Actually Taxes
RPGT isn't a tax on selling your house. It's a tax on the gain: the difference between what you paid and what you sold for, after deducting allowable costs. Sell at a loss, and there's no RPGT to pay, though you'll still need to file.
It applies to anyone disposing of real property in Malaysia: land, buildings, or shares in a "real property company" (a company whose assets are mostly made up of real property). That covers an individual selling a condo in Petaling Jaya, a Sdn Bhd offloading a shoplot in Johor Bahru, or a property-holding company in Ipoh selling its only asset through a share sale instead of a direct transfer.
RPGT Rate Table by Holding Period and Disposer Category
The rate you pay depends on two things: how long you held the property, and which category you fall into. This is where most of the confusion lives, because the three categories don't converge to the same endpoint.
| Holding Period | Company (Sdn Bhd) | Individual (Citizen/PR) | Individual (Non-Citizen) |
|---|---|---|---|
| Year 1 | 30% | 30% | 30% |
| Year 2 | 30% | 30% | 30% |
| Year 3 | 30% | 30% | 30% |
| Year 4 | 20% | 20% | 30% |
| Year 5 | 15% | 15% | 30% |
| Year 6 and beyond | 10% | 0% | 10% |
Notice the asymmetry: a non-citizen's rate stays at 30% all the way through Year 5. There's no Year 4/Year 5 step-down the way there is for a company or a citizen. And a company's rate never reaches zero, no matter how long it holds the property. That single difference is often the deciding factor in whether to hold a property personally or through a Sdn Bhd.
Company vs Individual Disposer: What Actually Differs
Beyond the rate table, the two categories diverge on exemptions, filing, and who's exposed personally if something goes wrong.
| Factor | Company (Sdn Bhd) | Individual (Citizen/PR) |
|---|---|---|
| Floor rate | 10% (Year 6+, never zero) | 0% (Year 6+) |
| Once-in-a-lifetime private residence exemption | Not available | Available, one claim ever |
| Schedule 4 flat exemption (RM10,000 or 10% of gain) | Not available | Available on every disposal |
| Love-and-affection "no gain, no loss" transfers | Not applicable (no family relationship) | Available between spouses, parent-child, grandparent-grandchild |
| Who files | The company, via its director or appointed tax agent | The individual, personally or via a tax agent |
| Personal exposure for late filing | Directors can be pursued personally if the company can't pay | Falls on the individual directly |
A Sdn Bhd that previously claimed an industrial building allowance on a property also needs to check whether disposal triggers a balancing adjustment on top of RPGT. See our capital allowance guide for how that's calculated separately from the RPGT computation.
Not sure which RPGT rate applies to your property disposal?
We calculate your chargeable gain, check every exemption you qualify for, and file CKHT 1A for you, done-for-you, before the 60-day deadline.
RPGT Exemption Checklist
Before accepting the rate table at face value, run through these. Most sellers qualify for at least one and don't realise it.
- Once-in-a-lifetime private residence exemption. A Malaysian citizen or PR can fully exempt the gain on one private residence, ever. It must be elected at filing; it isn't automatic.
- Love-and-affection transfers. Transfers between spouses, parent and child, or grandparent and grandchild are treated as "no gain, no loss," so RPGT is deferred, not charged, at the time of transfer.
- Schedule 4 flat exemption. Every individual disposer (citizen, PR, or non-citizen) can deduct RM10,000 or 10% of the chargeable gain, whichever is higher, before tax is calculated. Companies don't get this.
- Gifts to government, local authority, or approved charity. Disposals to these bodies are exempt outright.
- Compulsory land acquisition. Property taken under the Land Acquisition Act doesn't trigger RPGT the way a voluntary sale does.
How the Chargeable Gain Is Calculated
The computation is simpler than most sellers expect, as long as the paperwork from the original purchase was kept.
- Start with the disposal price. That's the price stated in the SPA, not the valuation.
- Deduct the acquisition price, meaning what was originally paid, including the original SPA price and stamp duty.
- Deduct incidental costs on both sides: legal fees, valuation fees, and agent's commission for the current sale.
- Deduct permitted enhancement costs, genuine renovation or improvement spending that increased the property's value, with receipts to prove it.
- Apply exemptions from the checklist above to what's left.
- Apply the rate from the holding-period table to the final chargeable gain.
Sellers in Kuala Lumpur and Penang who bought 10β15 years ago are the ones most likely to have lost the original SPA or renovation receipts. Without them, LHDN can disallow the deduction entirely and tax the full disposal price as gain.
The Retention Sum: What Buyers Must Withhold
This is the part sellers forget because it isn't their obligation directly, yet it affects how much cash actually reaches them at completion.
The purchaser's solicitor is legally required to withhold a retention sum from the sale proceeds and remit it to LHDN using Form CKHT 502, within 60 days of the disposal date. This acts as an advance payment against the seller's eventual RPGT bill. The percentage withheld depends on the disposer's residency status and entity type, and it's set against the final tax computed on CKHT 1A. If the retention sum exceeds the actual tax due, the excess is refunded.
Sellers should always confirm with their lawyer that the CKHT 502 remittance actually happened on time. A late remittance by the buyer's solicitor doesn't excuse the seller from their own 60-day CKHT 1A deadline, and the two obligations run on separate tracks even though they're linked financially.
Filing Deadline and Penalties
| Obligation | Deadline | Penalty if missed |
|---|---|---|
| Seller files CKHT 1A (or CKHT 1B for no-gain disposals) | Within 60 days of the SPA date | Offence under the RPGT Act 1976, can attract a separate fine on top of the tax penalty below |
| Buyer files CKHT 2A | Within 60 days of the SPA date | Same filing offence exposure, on the purchaser's side |
| Buyer's solicitor remits retention sum (CKHT 502) | Within 60 days of the SPA date | Solicitor and purchaser both exposed; seller's final tax position is unaffected either way |
| Pay tax after LHDN's Notice of Assessment | Within 30 days of the assessment date | Automatic 10% penalty on unpaid tax (Section 15C); further 5% if still unpaid 60 days later |
The disposal date is the SPA date, not the date money changes hands or the date the transfer is registered at the land office. Sellers who count from completion date routinely miscalculate their own 60-day window and file late without realising it.
Common RPGT Mistakes
- Counting the 60 days from completion instead of the SPA date. The clock starts earlier than most sellers assume.
- Assuming the once-in-a-lifetime exemption is automatic. It must be elected on the filing; LHDN won't apply it for you.
- Losing the original purchase documents, which makes it impossible to deduct the acquisition price properly.
- Treating a share sale in a property-holding company as RPGT-free because "it's shares, not land." If the company qualifies as a real property company, RPGT still applies.
- Assuming a Sdn Bhd eventually pays 0% RPGT like an individual does. It doesn't. The floor is 10%, permanently.
Frequently Asked Questions
What is RPGT and who has to pay it in Malaysia?
A tax on the profit from disposing of real property or real-property-company shares, charged under the RPGT Act 1976, applying to individuals and companies alike.
What is the RPGT rate for a Sdn Bhd selling property in 2026?
30% in Years 1β3, 20% in Year 4, 15% in Year 5, and 10% from Year 6 onward. The rate never drops to zero for a company.
Is there RPGT if I sell my only house after 6 years?
If you're a Malaysian citizen or PR disposing in Year 6 or later, the standard holding-period rate is 0%.
What is the once-in-a-lifetime RPGT exemption?
A full exemption on the gain from one private residence, available once ever to a citizen or PR, and must be elected at filing.
How much is the retention sum the buyer must withhold?
A percentage of the sale proceeds set by the disposer's residency and entity type, remitted to LHDN via CKHT 502 within 60 days, and offset against the final tax bill.
What happens if RPGT is paid late?
An automatic 10% penalty applies under Section 15C, with a further 5% if still unpaid 60 days after that.
Can a non-citizen get any RPGT exemption?
Not the once-in-a-lifetime or 0% rate, but the Schedule 4 flat exemption and love-and-affection transfer treatment still apply where relevant.
Disposing of a property through your Sdn Bhd, or personally?
We handle your RPGT computation, exemption checks, and CKHT 1A filing for you, done-for-you, before the 60-day deadline passes. Enquire now.
Or see our corporate tax guide, company tax return guide, our tax and LHDN compliance service, or get in touch.