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Real Property Gains Tax (RPGT) is a form of capital gains tax. RPGT is
charged on gains arising from the disposal of real property in Malaysia.
In the Budget 2011, RPGT has been increased for the first two years to
10 per cent each year from the 5 per cent previously. The tax increase
is to help curb speculation in the real estate market.
However, the tax regime of 5 per cent will be imposed on the third,
fourth and fifth year of disposal of an asset, so that genuine buyers
are not discouraged from purchasing. There will be no tax on property
disposed after the fifth year.
These real property is defined as:
1. any land situated in Malaysia and any interest, option or other right
in or over such land; or
2. shares in a real property company
Withholding of RPGT
With effect from 1 January 2010, an acquirer of chargeable asset must
withhold 2% of the total value of the acquisition price to be paid to
the Inland Revenue Board within 60 days from the date of disposal.
Exemptions of RPGT
1. an amount of RM10,000 or 10% of the chargeable gain, whichever is
greater, accruing to an individual (w.e.f 1 January 2010);
2. gain arising on disposal as a result of compulsory acquisition of
property under law; and
3. gain accruing to an individual who is a citizen or a permanent
resident in respect of the disposal of one private residence once in a
lifetime.
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