Must You Pay RPGT When Selling Your Property?

When We Sell A Property, Must We Pay Real Property Gains Tax (RPGT)?

When we sell a property and make a profit, must we pay Real Property Gains Tax (RPGT)?

The short answer is:

Maybe.

And this is why I think every property investor should understand RPGT before buying and selling properties.

The good news is that RPGT is not a tax simply because you sold your property.

It is a tax on the gain from the disposal of the property.

And the rate depends very much on who you are and how long you have held the property.

So, let’s look at the latest rules.

Why do we have RPGT?

The basic idea behind RPGT is quite simple.

It is meant to discourage excessive speculation and property flipping.

Imagine buying a property today and selling it six months later simply because the price has gone up.

If everyone does this, property prices can rise very quickly.

RPGT makes short-term flipping less attractive because part of the gain may have to go to the government.

But here’s something important.

RPGT is based on the gain, not simply the selling price.

If you bought a property for RM500,000 and eventually sold it for RM500,000, there is no gain.

So, there is no RPGT payable simply because you sold the property.

HASiL confirms that RPGT is imposed on gains arising from the disposal of chargeable assets.

So how much is RPGT today?

For a Malaysian citizen or permanent resident individual, the current rates are:

Holding period	RPGT rate
Within 3 years	30%
Fourth year	20%
Fifth year	15%
Sixth year onwards	0%

This is quite significant.

If you sell during the fifth year, the applicable rate is still 15%.

But from the sixth year onwards, the RPGT rate for a Malaysian individual is 0%.

For companies incorporated in Malaysia, the rates are higher:

Holding period	RPGT rate
Within 3 years	30%
Fourth year	20%
Fifth year	15%
Sixth year onwards	10%

For non-citizens and non-PR individuals, the rate is 30% for disposals within the first five years and 10% from the sixth year onwards.

So yes, who owns the property matters.

But don’t simply calculate selling price minus purchase price

This is another common misunderstanding.

Let’s say you bought a property for RM500,000 and sell it for RM650,000.

At first glance:

RM650,000 – RM500,000 = RM150,000 gain

But the actual RPGT calculation can take into account certain allowable costs.

HASiL allows certain incidental acquisition and disposal costs, as well as qualifying expenditure that enhances or preserves the value of the property. Professional fees, commissions and certain legal costs may also be relevant.

So, don’t simply assume that the RM150,000 is automatically the taxable gain.

Keep your documents. Your purchase agreement. Legal fees.

Renovation or improvement costs where applicable. Selling costs.

Agent commission. And other relevant supporting documents.

You may need them.

Here’s a simple example

Suppose I bought a property for:

RM500,000

And after four years, I sell it for:

RM650,000

Let’s keep the calculation simple and assume the chargeable gain is RM150,000.

At 20% RPGT:

RM150,000 × 20% = RM30,000

So I don’t simply walk away with RM150,000 of gain.

But even after paying RM30,000, I still have RM120,000 before considering other transaction costs.

Personally, if I made a genuine RM150,000 gain, I wouldn’t complain too much about paying some RPGT lah.

Because I am still making money.

What if I sell at a loss?

This is where RPGT is quite different from a simple “tax whenever you sell” concept.

If the disposal results in a loss or no gain/no loss, there may be no RPGT payable.

HASiL specifically provides for reporting disposals that result in a loss or no gain/no loss.

And this is why I don’t think we should look at RPGT as a punishment for selling property.

It is more accurately a tax on certain gains.

There is also a big exemption for your own home

For a Malaysian citizen or permanent resident individual, there is a once-in-a-lifetime exemption for the disposal of one private residence.

The property must qualify as a private residence and the election must be made through the required process.

Once you use this exemption, you cannot use the same exemption again for another private residence.

So don’t simply assume:

“I am selling my own house, therefore RPGT doesn’t apply.”

Check the rules and whether you have previously used the exemption.

So, should RPGT stop us from investing in property?

For me, no.

If I buy a property because I believe it is fundamentally good, I am prepared to hold it for the longer term.

If the property appreciates and I eventually sell it at a profit, I am happy.

And if I have held it for more than five years as a Malaysian individual, the current RPGT rate is 0%.

That makes a big difference.

But I also don’t think we should buy a property simply because we think:

“Price will go up quickly, then I sell!”

That is speculation.

Property investment should be more than that.

Look at the location.

Look at the demand.

Look at rental potential.

Look at affordability.

Look at future supply.

And importantly, look at how long you are realistically prepared to hold.

RPGT is just one part of the property investment equation.

Don’t buy a bad property simply because you think you can avoid RPGT.

And don’t reject a good property simply because you may eventually have to pay some tax on the gain.

If you make a genuine profit, paying some tax is not the worst problem to have. Haha.

Happy investing yeah.

Important: RPGT rules can depend on the specific facts of the transaction, ownership structure and disposal circumstances. This article is for general information, not tax or legal advice.

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Sources

• Original article: “When we sell a property, must we pay Real Property Gains Tax (RPGT)?” – kopiandproperty.com
• HASiL – Current RPGT rates
• HASiL – RPGT exemptions
• HASiL – Disposal and acquisition price / allowable costs
• HASiL – 2026 RPGT Operational Guidelines
• HASiL – RPGT payment and procedures