Selling a property in Malaysia is rarely as simple as agreeing on a price and collecting the proceeds. One of the biggest surprises for first-time sellers is Real Property Gains Tax, or RPGT — a tax charged on the profit you make when you dispose of property. If you bought a house for RM400,000 and sell it for RM600,000, the taxman wants a slice of that RM200,000 gain, and the amount depends heavily on how long you held the property.
This guide breaks down exactly how RPGT works for sellers in 2026: the rates, the calculation, the exemptions you may qualify for, the 3% your buyer's solicitor will withhold at completion, and how to file the CKHT forms with LHDN within the deadline. Get this right and you keep more of your sale proceeds while staying fully compliant.
What Is RPGT and When Does It Apply?
RPGT (Real Property Gains Tax, or Cukai Keuntungan Harta Tanah — CKHT in Malay) is a tax administered by the Inland Revenue Board of Malaysia (LHDN) under the Real Property Gains Tax Act 1976. It is triggered whenever there is a disposal of a chargeable asset — most commonly when you sell a house, condominium, piece of land, or shares in a real property company (RPC).
The most important thing to understand is that RPGT is charged on your gain, not on the sale price. The gain is the difference between your disposal price (what you sell for) and your acquisition price (what you originally paid), after allowable adjustments. If you sell at a loss, there is no chargeable gain and no RPGT is payable — although you still have a filing obligation, which we cover below.
A "disposal" is broader than a straightforward sale. It can include:
- Selling property on the open market or via subsale
- Transferring property by way of gift (in some cases)
- Disposing of shares in a real property company
- Certain exchanges or transfers between parties
The date of disposal is usually the date of the Sale and Purchase Agreement (SPA), and this date is what determines your holding period and therefore your tax rate. Because the rate drops sharply the longer you hold, timing your sale can materially change your tax bill.
RPGT Rates by Holding Period (2026 Table)
RPGT rates are tiered by how many years you held the property before disposing of it. The rate also differs depending on whether you are a Malaysian citizen or permanent resident, a foreigner (non-citizen), or a company. The table below reflects the rate structure in force as of 2026.
| Holding period (from acquisition to disposal) | Malaysian citizens & PRs | Companies | Non-citizens / foreigners |
|---|---|---|---|
| Disposal within 1st year | 30% | 30% | 30% |
| Within 2nd year | 30% | 30% | 30% |
| Within 3rd year | 30% | 30% | 30% |
| Within 4th year | 20% | 20% | 30% |
| Within 5th year | 15% | 15% | 30% |
| 6th year onwards | 0% | 10% | 10% |
Key takeaways from this schedule:
- Malaysian citizens and PRs pay 0% RPGT if they hold the property for more than five years (i.e. dispose in the sixth year or later). This is the single biggest lever sellers have.
- Companies never reach 0% — they pay 10% from the sixth year onwards.
- Foreigners and non-citizens face a flat 30% for the first five years and 10% thereafter, with no drop to zero.
The brief outline above summarises this as "Year 1–3: 30%, Year 4–5: 20%, Year 6+: 0% for citizens." The 0% sixth-year rate for citizens has been a stable feature of the regime since the abolition of the previous flat 5% sixth-year charge, but always confirm the current rates against the latest LHDN guidance or your solicitor before completing a sale, as Budget announcements can adjust these tiers.
Because the gap between Year 5 (15%) and Year 6 (0%) is so large for citizens, sellers close to the five-year mark should think carefully about whether waiting a few extra months to cross into the sixth holding year is worthwhile.
How to Calculate Your RPGT Liability
RPGT is calculated in a few clear steps. First, you establish your chargeable gain; then you apply the relevant rate; then you subtract any exemptions.
The basic formula:
Chargeable Gain = Disposal Price − Acquisition Price − Permitted Deductions
RPGT Payable = (Chargeable Gain − Exemptions) × RPGT Rate
Permitted (allowable) deductions reduce your taxable gain and are worth itemising carefully. They typically include:
- Legal fees on both purchase and sale
- Stamp duty paid on the original acquisition
- Real estate agent's commission on the sale
- Costs of enhancing or improving the property (e.g. renovations, extensions, a new kitchen) — but not routine repairs or maintenance
- Costs of defending or establishing your title to the property
- Advertising and marketing costs incurred to find a buyer
Worked example
Let's use the scenario from the outline. You are a Malaysian citizen who bought a condominium in 2022 and sells it in 2026.
| Item | Amount (RM) |
|---|---|
| Disposal price (sale, 2026) | 600,000 |
| Less: acquisition price (purchase, 2022) | (400,000) |
| Gross gain | 200,000 |
| Less: legal fees (purchase + sale) | (6,000) |
| Less: stamp duty on acquisition | (8,000) |
| Less: agent commission on sale (2% + SST) | (12,720) |
| Less: kitchen + bathroom renovation (enhancement) | (25,000) |
| Chargeable gain | 148,280 |
The property was acquired in 2022 and disposed of in 2026, which falls in the fourth holding year — so the citizen rate is 20%.
Now apply the once-per-disposal exemption (the greater of RM10,000 or 10% of the chargeable gain — explained in the next section):
| Step | Amount (RM) |
|---|---|
| Chargeable gain | 148,280 |
| Less: exemption (10% of 148,280 = 14,828, vs RM10,000 → use 14,828) | (14,828) |
| Net chargeable gain | 133,452 |
| RPGT at 20% | 26,690.40 |
So in this example your RPGT liability is approximately RM26,690. Keep every receipt and invoice — without documentary proof, LHDN may disallow your deductions and tax the full RM200,000 gain instead, which at 20% would be RM40,000 before the exemption. Good record-keeping in this example saves you over RM13,000.
RPGT Exemptions for Malaysian Citizens
Malaysian citizens (and PRs in some cases) enjoy several exemptions that can dramatically reduce or even eliminate RPGT.
1. Once-in-a-lifetime private residence exemption (Section 8). Every Malaysian citizen and permanent resident is entitled to a full exemption on the gain from disposing of one private residential property in their lifetime. You can only claim it once, so most people save it for the disposal that generates the largest gain. To qualify, the property must be a residential property and you must elect this exemption in writing in your CKHT filing.
2. The RM10,000 or 10% exemption (Schedule 4). For every disposal, an individual is exempt on the greater of RM10,000 or 10% of the chargeable gain. This applies automatically per disposal and is the exemption we used in the worked example above.
3. Transfers between family members. Gifts and transfers of property between close family members — for example between parent and child, husband and wife, or grandparent and grandchild — may be treated as a "no gain, no loss" transaction, meaning no RPGT is triggered at the point of transfer. The recipient effectively inherits the original acquisition price for future RPGT purposes.
4. Inheritance. Property received through inheritance is not a disposal by the deceased's estate that attracts RPGT at the point of transfer to the beneficiary. Importantly, the beneficiary's acquisition price is generally taken as the market value at the date of transfer, and their holding period can start from that date — which matters if they later sell. We cover this in more depth in our guide on selling inherited property in Malaysia.
| Exemption | Who qualifies | Effect |
|---|---|---|
| Once-in-a-lifetime (S.8) | Citizens & PRs, one residential property | Full exemption on the gain |
| RM10,000 or 10% (Sch. 4) | All individuals, every disposal | Reduces chargeable gain |
| Family transfer | Close relatives | No gain, no loss — no RPGT at transfer |
| Inheritance | Beneficiaries | No RPGT at transfer; new acquisition value |
If you want the full picture of the RPGT regime including the buyer's perspective and how rates have changed over the years, see our companion explainer on RPGT in Malaysia for 2026.
Agent Retention: What Your Buyer's Solicitor Will Withhold
Here is a part of the process that catches many sellers off guard. When you sell, you do not receive the full purchase price into your hands and then settle RPGT separately. Instead, the law requires the buyer (acquirer) — acting through their solicitor — to retain a portion of the purchase price and remit it directly to LHDN as a provisional payment towards your RPGT. This is sometimes called the "retention sum."
The retention rates as of 2026 are:
| Seller (disposer) status | Retention rate | Withheld from |
|---|---|---|
| Malaysian citizen or PR | 3% | Total disposal price |
| Non-citizen / foreigner / company without local incorporation in some cases | 7% | Total disposal price |
So if you are a citizen selling for RM600,000, the buyer's solicitor withholds RM18,000 (3%) and sends it to LHDN within 60 days of the disposal date. This 3% is a provisional payment, not the final tax. Once your actual RPGT is assessed:
- If your final RPGT liability is higher than the retention, you pay the balance.
- If it is lower — for instance, you qualify for a full exemption or sold at a loss — you can claim a refund of the excess from LHDN.
Practical tip: because the 3% (or 7%) is withheld from the gross price, sellers who expect to pay little or no RPGT (such as those holding beyond five years, or claiming the once-in-a-lifetime exemption) should plan their cash flow around having that retention temporarily locked up until a refund is processed. Refunds can take several months. Make sure your solicitor files your CKHT promptly so the refund clock starts as early as possible.
How to File RPGT (CKHT Forms)
RPGT is self-assessed and filed using the CKHT family of forms. Both the seller and buyer have obligations, and the deadlines are strict — 60 days from the date of disposal (the SPA date).
| Form | Filed by | Purpose |
|---|---|---|
| CKHT 1A | Seller (disposer) | Declaration of disposal of real property |
| CKHT 1B | Seller | Declaration of disposal of shares in a real property company (RPC) |
| CKHT 2A | Buyer (acquirer) | Declaration of acquisition of real property |
| CKHT 3 | Seller | Notification to claim exemption / no chargeable gain (e.g. loss or full exemption) — this is what stops the buyer withholding the retention |
| CKHT 502 | — | The receipt / form evidencing the 3% retention remitted to LHDN |
The general filing flow looks like this:
- Sign the SPA — this fixes the disposal date and starts the 60-day clock.
- Your solicitor prepares CKHT 1A (and CKHT 3 if you are claiming an exemption or made a loss).
- The buyer's solicitor prepares CKHT 2A and arranges the 3% (or 7%) retention.
- Submit within 60 days of the disposal date, online via LHDN's e-CKHT portal in MyTax, or manually at an LHDN branch.
- LHDN issues a Notice of Assessment confirming your final RPGT. You then pay any balance, or claim a refund if the retention exceeded your liability.
Late filing or late payment can attract penalties, so do not leave this to chance. In practice your conveyancing solicitor handles the bulk of the CKHT paperwork as part of the sale — but you are responsible for providing accurate figures and the supporting documents for your deductions. If you are still deciding whether to engage a solicitor and agent or to handle the sale yourself, our comparison of selling with an agent versus DIY in Malaysia walks through the trade-offs.
FAQs
Q: Does RPGT apply to my only house?
Yes, RPGT technically applies to any disposal of a chargeable asset, including your only home. However, Malaysian citizens and permanent residents are entitled to a once-in-a-lifetime full exemption on the gain from one private residential property. If you elect to use this exemption (via CKHT 3) when selling your only house, you can effectively pay zero RPGT on that gain. The catch is that you can only use it once, so if you anticipate selling another property with a larger gain later, you may choose to save it. You must actively claim it — it is not applied automatically.
Q: What counts as permitted expenses?
Permitted (allowable) deductions are costs that genuinely relate to acquiring, enhancing, or disposing of the property. These include legal fees on purchase and sale, stamp duty paid on acquisition, real estate agent commission, advertising costs, costs of defending your title, and capital improvements that enhance the property's value — such as renovations, extensions, or installing new fixtures. What does not count are routine repairs and maintenance (repainting, fixing a leak, servicing the air-conditioner) and your own time or financing costs such as loan interest. Always keep original invoices and receipts; LHDN can disallow undocumented deductions.
Q: Does RPGT apply to Bumiputera lots?
RPGT applies to the disposal of property regardless of whether it is a Bumiputera-reserved lot — the tax is on the gain, not on the title classification. What differs with a Bumi lot is the pool of eligible buyers and the need for state consent to release the Bumi restriction (if selling to a non-Bumiputera buyer), which can affect your sale price and timeline rather than the RPGT itself. The same holding-period rates and exemptions apply. For the wider rules around buying and selling these lots, see our guide on Bumiputera lots in Malaysia.
Q: What if I make a loss?
If you sell for less than your adjusted acquisition price, there is no chargeable gain and therefore no RPGT to pay. However, you should still notify LHDN by filing the appropriate CKHT forms (including CKHT 3 to declare the loss or no-gain position) so that the buyer's solicitor is not required to withhold and remit the 3% retention, or so that any retention already made can be refunded. An allowable loss can also, subject to the rules, be carried forward to offset chargeable gains on future disposals — so it is worth documenting properly rather than ignoring.
Ready to Sell? Start With the Right Price
Understanding RPGT is only one piece of a successful sale. The biggest factor in how much you walk away with is pricing your property correctly and reaching serious buyers. Browse current listings to benchmark your home against the market on SuperHomes properties, or connect with a verified local professional through our find an agent directory to handle the SPA, CKHT filing, and negotiation end to end. If you are weighing whether to upgrade after selling, explore the latest new project launches across Malaysia.
