RPGT rates in Malaysia in 2026 depend on who you are and how long you held the property: 30% if you sell within three years, 20% in the fourth year, 15% in the fifth, and 0% from the sixth year for citizens and permanent residents. Companies pay 10% from year six; foreigners pay 30% for five years, then 10%. Tax is charged on the net gain, not the sale price.
If you sell a property in Malaysia for a profit, the government takes a cut. This tax is known as the Real Property Gains Tax (RPGT), levied under the Real Property Gains Tax Act 1976 and collected by LHDN. It was introduced to curb property speculation, ensuring that housing remains affordable for genuine buyers.
Whether you are "flipping" a house or selling your family home to upgrade, understanding RPGT is essential to calculate your actual net profit.
What is RPGT?
RPGT is a tax charged on the profit (gain) derived from the disposal of real property, or of shares in a real property company. It applies to residential, commercial, industrial and agricultural property alike. The rate depends on:
- Who you are (Citizen, Permanent Resident, Foreigner, or Company).
- How long you have owned the property (Holding period, generally counted from the date of the purchase agreement to the date of the sale agreement).
RPGT Rates Table (Effective 2026)
These rates have applied since 1 January 2022 and are unchanged for 2026.
| Holding period | Malaysian citizens & PRs (Part I) | Companies incorporated in Malaysia (Part II) | Foreigners & foreign companies (Part III) |
|---|---|---|---|
| Within 3 years | 30% | 30% | 30% |
| In the 4th year | 20% | 20% | 30% |
| In the 5th year | 15% | 15% | 30% |
| 6th year onwards | 0% | 10% | 10% |
(Source: LHDN, RPGT rates by category under Schedule 5 of the Real Property Gains Tax Act 1976, effective 1 January 2022; checked 30 Sep 2026.)
Note: For Malaysian citizens and permanent residents, selling in the 6th year or later means 0% RPGT. This is a significant incentive for long-term holding. Part I also covers partnerships; Part II covers trustees and registered bodies as well as companies.
How the holding period is counted
The rate depends on the gap between the date you acquired the property and the date you dispose of it, and for a sale by written agreement both dates are generally the SPA dates, not the dates the title was transferred or the money changed hands. For a home bought under an SPA dated 15 March 2021:
| Sale SPA signed | Year of disposal | Citizen / PR rate |
|---|---|---|
| Before 15 March 2024 | Within 3 years | 30% |
| 15 March 2024 to 14 March 2025 | 4th year | 20% |
| 15 March 2025 to 14 March 2026 | 5th year | 15% |
| From 15 March 2026 | 6th year onwards | 0% |
If you are close to a boundary, a few weeks' delay in signing the sale SPA can cut the rate by 5 to 15 percentage points. Check the dates on both agreements with your lawyer before you accept an offer.
Foreigners and companies
Non-citizens who are not permanent residents pay 30% on any sale in the first five years and 10% after that, with no 0% band and no Section 8 exemption, though they still get the RM10,000 or 10% exemption as individuals. Malaysian companies follow the citizen rates for the first five years but pay 10% from the sixth year, and do not get the 10% exemption. Shares in a real property company (a company whose assets are mainly Malaysian real property) are also chargeable to RPGT, so holding a house through a company does not avoid it.
How is RPGT Calculated?
RPGT is calculated on the Chargeable Gain, not the total selling price.
Formula:
Chargeable Gain = Disposal Price - Acquisition Price - Allowable Expenses
Taxable Gain (individuals) = Chargeable Gain - the greater of RM10,000 or 10% of the Chargeable Gain
RPGT = Taxable Gain x Rate
- Acquisition Price: The price you bought it for, plus acquisition costs such as legal fees, stamp duty and valuation.
- Disposal Price: The price you are selling it for, less disposal costs such as agent commission and legal fees.
- Allowable Expenses: Costs that enhance the property's value (renovation, extensions) with receipts. Loan interest, maintenance fees, assessment and quit rent are not deductible.
- The RM10,000 or 10% exemption (Schedule 4, paragraph 2) applies to individuals on every disposal. Companies do not get it.
Example Calculation:
- Bought in 2020: RM500,000
- Sold in 2023 (within 3 years of ownership): RM700,000
- Gross Profit: RM200,000 (ignoring costs for simplicity)
- Less exemption: the greater of RM10,000 or 10% = RM20,000
- Taxable gain: RM180,000
- RPGT Rate: 30% (Sold within 3 years)
- Tax Payable: RM180,000 x 30% = RM54,000
Worked example: the same sale in every year
A home bought for RM1,150,000 and sold for RM1,450,000, the median asking price across for-sale listings in Bayan Lepas on SuperHomes (n=116; SuperHomes listings, Sep 2026). Allowable costs of about RM72,800 (RM30,000 MOT stamp duty and about RM13,800 legal fees on purchase, RM29,000 agent commission on sale) leave a chargeable gain of about RM227,200.
| Year of sale | Citizen / PR | Foreigner (individual) | Malaysian company |
|---|---|---|---|
| Within 3 years | about RM61,300 | about RM61,300 | about RM68,200 |
| 4th year | about RM40,900 | about RM61,300 | about RM45,400 |
| 5th year | about RM30,700 | about RM61,300 | about RM34,100 |
| 6th year onwards | RM0 | about RM20,400 | about RM22,700 |
Individuals' figures apply the 10% exemption (about RM22,700) first; the company column does not. Waiting from year three to year six saves a citizen seller over RM61,000 on this sale. Try your own numbers in the RPGT calculator.
Who Pays, and the Retention Sum
The seller pays RPGT, but the buyer collects part of it upfront. When you buy, your lawyer must retain part of the price and remit it to LHDN within 60 days of the disposal date: generally 3% of the price for a citizen or PR seller and 7% for a seller who is not a citizen or PR. If the seller's actual RPGT is lower, LHDN refunds the difference to the seller after assessing the return. (Source: RPGTA s.21B, 7% rate for non-citizen sellers since 1 January 2018; checked 30 Sep 2026.)
Filing Deadlines Under Self-Assessment
Since 1 January 2025, RPGT has been self-assessed: the seller works out the tax, files the return electronically through e-CKHT, and the return is treated as the assessment.
| Obligation | Deadline | If late |
|---|---|---|
| Seller's RPGT return (e.g. CKHT 1A) | Within 60 days of disposal | Penalties under the RPGT Act |
| Payment of RPGT | Within 90 days of disposal | 10% late payment penalty |
| Buyer's retention remitted to LHDN | Within 60 days of disposal | Buyer is liable |
A return is required even when no tax is payable, for example on a 0% sale in the sixth year. (Source: Finance Act 2024 RPGT self-assessment provisions, in force 1 January 2025, as summarised by Rödl & Partner, February 2025; checked 30 Sep 2026.)
Exemptions
There are ways to legally avoid or reduce RPGT:
- Once-in-a-Lifetime Exemption: Malaysian citizens and permanent residents can elect, once, to exempt the gain on the disposal of a private residence (Section 8, elected on Form CKHT 3 through e-CKHT; irrevocable).
- Family Transfer: A gift of property between husband and wife, parent and child, or grandparent and grandchild, where the giver is a citizen, is treated as no gain, no loss (Schedule 2, paragraphs 3 and 12). The same applies to a transfer between former spouses under a divorce or annulment court order (paragraph 3(1)(b)(ia)). The recipient takes over the giver's original cost.
- RM10,000 or 10%: Every individual gets this on each disposal (Schedule 4, paragraph 2).
- Low-cost housing: The old exemption for citizens selling homes of RM200,000 or less only applied from the sixth year, which is already 0% for citizens, so it no longer changes anything.
Our RPGT exemptions guide explains each one, when to use Section 8, and how inheritance is treated.
Common Mistakes Sellers Make
- Counting years by calendar year. The holding period generally runs from the purchase agreement date to the sale agreement date. Signing a sale SPA a few weeks early can push you into a higher-rate year.
- Not keeping receipts. Renovation you cannot prove is not deductible.
- Deducting loan interest. It is not an allowable expense for RPGT.
- Skipping the return on a 0% sale. You still have to file within 60 days.
- Using Section 8 on a year-six sale. Citizens pay 0% anyway, so the once-in-a-lifetime election is wasted.
Conclusion
RPGT can take a significant chunk out of your profits if you sell too soon. For Malaysians, holding a property until the sixth year removes RPGT entirely; if you must sell earlier, the 10% exemption and a well-timed Section 8 election are your main tools. Before you list, check what similar homes are asking, for example in Bandar Sri Damansara, so your gain estimate starts from a realistic price.
FAQs: RPGT in Malaysia
Q: What is the RPGT rate if I sell my house after 5 years?
For Malaysian citizens and permanent residents, RPGT drops to 0% from the 6th year of ownership onwards. Foreigners and companies still pay 10% at that point, since only citizens and PRs get the full exemption.
Q: How is RPGT calculated in Malaysia?
RPGT is charged on the chargeable gain: disposal price minus acquisition price minus allowable costs (legal fees, stamp duty, agent commission and enhancement costs such as renovation). Individuals then deduct the greater of RM10,000 or 10% of the gain, and the balance is taxed at the rate for their category and holding period.
Q: What are the RPGT rates for 2026?
The 2026 rates are the same as since 2022: 30% within three years for everyone; 20% in year four and 15% in year five for citizens, PRs and Malaysian companies; 0% from year six for citizens and PRs, 10% for companies. Foreigners pay 30% for five years, then 10%.
Q: What is the RPGT retention sum?
When you buy a property, your lawyer retains part of the price and pays it to LHDN within 60 days: generally 3% if the seller is a citizen or PR, and 7% if the seller is a foreigner. It is credited against the seller's RPGT, and any excess is refunded to the seller.
Q: Does RPGT apply to commercial property?
Yes. RPGT applies to all real property, including shophouses, offices and land, at the same rates. The difference is that the Section 8 once-in-a-lifetime exemption only covers a private residence, so it cannot be used on commercial property.
Q: Is there any way to avoid paying RPGT in Malaysia?
Yes. Citizens and PRs pay 0% from the sixth year of ownership, can elect the once-in-a-lifetime private residence exemption once, and gifts between spouses, parents and children, or grandparents and grandchildren (from a citizen) are treated as no gain, no loss. Every individual also gets RM10,000 or 10% of the gain exempted on each sale.
Q: Do I need to file RPGT if I sold after 5 years and owe nothing?
Yes. Every disposal must be reported through e-CKHT within 60 days, even at a 0% rate. The buyer's lawyer will still retain and remit the retention sum, which you can then have refunded.
