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Real Property Gains Tax (RPGT)

 

Budget 2015 never touch on RPGT, meaning that the RPGT will maintenance as same as announced in Budget 2014.

In the Budget 2014, the government is proposing the RPGT be increased to 30% from the current 15% on all properties sold before three years from the date of purchase and whereas for disposals within the holding period up to 4 and 5 years, the rates are increased to 20% and 15%, respectively. For disposals made in the sixth and subsequent years, no RPGT is imposed on citizens, whereas companies are taxed at 5%.

Real Property Gain Tax (RPGT) is a tax imposed on gains from disposal of all types of properties such as residential and commercial buildings, land and shares of real property companies. RPGT is imposed on the net gains from disposal of property after deducting the following costs:-

 1. Acquisition price
 2. Stamp duty
 3. Legal fees
 4. Renovation costs
 5. Commission for sales and administrative payments

The following RPGT exemptions which were implemented under the previous regime continue to be available:

(a) RPGT exemption on gains from the disposal of one residential
property once in a lifetime to individuals;

(b) RPGT exemption of up to RM10,000 or 10% of the net gains,
(whichever is higher) from the disposal of real property by individuals;

and

(c) RPGT exemption on gains arising from the disposal of real property between family members (e.g. husband and wife, parents and children, and grandparents and grandchildren).

The current RPGT rates vary from 0% to 30%, depending on the holding period. The holding period refers to the period between the acquisition date and the disposal date of the property.

To further curb speculative activities, the RPGT rates on disposal of properties and shares in real property companies effective 1 January 2014 shall be as follows:-

 Disposal
 
(from purchased date)
 Company  Individual
 (Citizen & PR)
 Individual
 (Non Citizen)
 1st 3 years  30%  30%  30%
 in 4th year  20%  20%  30%
 in 5th year  15%  15%  30%
 After 5th year  5%  0  5%
 
Example To Illustrate Calculation Of RPGT
 

Disposal Price on 2 Jan 2014

 

300,000

 

Less: Renovation/extension costs

20,000

 

 

Legal fees

3,000

23,000

277,000

Acquisition Price on 1 Jan 2012

 

200,000

 

Add: Duty stamp paid

3,000

 

 

Legal fees

2,500

5,500

205,500

Profit

 

 

71,500

Less: Exemption of RM10,000 or 10% of the chargeable gain, whichever is greater

 

 

7,150

(-10,000)

Chargeable gain

 

 

61,500

Rate of RPGT 30% applied for disposal in 1st 3 years after the date of acquisition.

RPGT on RM61,500 @ 30% = RM18,450

 

 
 

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