What we need to know about RPGT

It is important that consumers have basic knowledge of reporting gains from the disposition of real estate.

IRBM article / Photo by TMR FILE PIX

There has been a growing awareness about owning real estate at a young age, however, many still have little knowledge of how to report gains from the disposal of real estate.

Although the preparation of the property transfer documents is usually handled by a lawyer or tax agent, it is important for us to have some basic knowledge about this.

The Real Estate Gains Tax (RPGT) is a tax levied on gains from the disposal of real estate, including apartments, houses, condominiums, apartments, farms, and vacant land, among others.

As of October 21, 1988, this tax is extended to capital gains on the sale of shares of a real estate company.

The RPGT was introduced in 1976 under the Real Estate Gains Tax Act 1976. However, from April 2007 to December 2009, this tax was temporarily exempted through the Real Estate Gains Tax (Exemption) Ordinance 2007. [PU(A)146/2007].

The exemption order was revoked effective January 1, 2010, through the 2009 Real Estate Gains Tax Exemption Order [PU(A)376/2009].

How does stamp duty relate to the imposition of RPGT?

According to the RPGT Act of 1976, the RPGT is a capital gains tax imposed by the Inland Revenue Board of Malaysia (IRBM) for every profit made from the sale of property or shares in a real estate company when the resale price is higher than the purchase price. .

RPGT is not charged if the property’s resale price is equal to or less than the original price. It is only applicable when there is a gain on the disposal of the property.

The imposition of a tax on the transfer of property involves not only the eliminator but also the purchaser, when they are subject to the RPGT for the eliminator and to the stamp duty for the purchaser.

However, gains from the disposal of real estate or shares of a real estate company may also be taxed under the Income Tax Act 1967 if the gains result from business transactions.

RPGT rates

RPGT tariffs are determined based on the elimination category if:

A company incorporated in Malaysiansia or a trustee of a trust or company registered under the Societies Act 1966;

Non-nationals and non-permanent residents or estate of the deceased who was non-citizens and non-permanent residents or unincorporated companiesassessed in Malaysia; Where

Other than the above. For example, individual citizens and permanent residents or the estate of the deceased citizen or permanent resident.

The RPGT rate is charged based on the asset’s holding period, i.e. from the date the asset is first held by the eliminator until the date of disposal. RPGT rates are lower for assets held longer in the hands of the eliminator.

Responsibilities of the eliminator and the purchaser

The transfer of ownership transaction involves two parties – the eliminator and the acquirer, who both have their respective responsibilities.

links, including submitting the RPGT return form which can be downloaded from the official IRBM portal or obtained from the nearest IRBM agency.

Each eliminator and acquirer must submit a completed, clear and signed RPGT return form. Also make sure you have an income tax reference number. Income tax registration

the reference number can be made through the e-Register application at the address https://mytax.hasil.gov.my/ or in all IRBM branches.

The form must be submitted within 60 days of the date of disposal, the date of disposal referring to the date of the contract for the sale and purchase of the property. The form must be completed separately depending on the number of eliminators / acquirers.

Ensure that the supporting documents for the disposal, the acquisition and the expense reports for proof are kept if the IRBM requests it.

Tax incentives for the disposal of assets during a pandemic

The government had put in place several economic recovery plans to ease the burden on the population following the Covid-19 pandemic. As part of the National Economic Regeneration Plan (Penjana) announced on June 5, 2020, an RPGT exemption is granted to Malaysian individuals upon the disposal of residential houses made between June 1, 2020 and December 31, 2021. The agreement must be agreed upon. duly stamped no later than January 31, 2022.

This exemption is limited to the transfer of three residential house units per individual compared to the existing exemption under Article 8 of the RPGT Act, which was previously limited to one unit.

The RPGT exemption is granted to individuals only for a private residence such as a building or part of a building in Malaysia owned by an individual and occupied or certified eligible to be occupied as a residence, provided that the applicant is an individual Malaysian citizen or permanent resident of Malaysia.

In addition to revitalizing the real estate market, this RPGT exemption is certainly a relief for Malaysians who have been affected by the Covid-19 pandemic and have had to sell their homes to streamline their cash flow.

For all inquiries and clarifications concerning the RPGT and stamp duty, the public is advised to meet the agents of any IRBM branch nearby by making an appointment online at https://janjitemu.hasil.gov.my/.


This article is from IRBM.

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