# Real Property Gains Tax (RPGT / CKHT)

> A guide to Real Property Gains Tax (RPGT/CKHT) in Malaysia — the tax on gains from disposing of real property and shares in real property companies, including rates by holding period, exemptions, and filing responsibilities.

- Category: law
- Language: en
- Status: published
- Updated: 2026-08-07
- Canonical: https://negaraku.md/en/law/real-property-gains-tax

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You buy a house, its price rises, you sell at a profit — and the Inland Revenue Board wants its share. That is Real Property Gains Tax (RPGT), or *Cukai Keuntungan Harta Tanah* (CKHT): a tax imposed not on the sale price, but on the **gain** you make when you dispose of real property in Malaysia. How much you pay hinges on one main thing — how long you held the asset before selling it.

## What is RPGT and which assets are chargeable?

RPGT is governed by the **Real Property Gains Tax Act 1976**, which, according to the Inland Revenue Board (LHDN), was introduced on 7 November 1975 to replace the Land Speculation Tax Act 1974. It is imposed on gains from the **disposal of chargeable assets located in Malaysia** — residential homes, commercial buildings, plantations, and vacant land.

Chargeable assets are not limited to land and buildings alone. According to LHDN, since 21 October 1988, RPGT has also been extended to gains from the disposal of **shares in a real property company** (RPC) — that is, a company whose tangible assets consist largely of real property.

The basic formula is simple:

> **Chargeable gain = Disposal price − Acquisition price − Allowable expenses**

Allowable expenses include legal costs, real estate agent fees, stamp duty on the purchase, and renovation costs that add value. After deducting any exemptions you qualify for, it is the remaining gain that is charged the RPGT rate.

## What are the RPGT rates by holding period?

The RPGT rates are set out in **Schedule 5** of the Act, which divides disposers into three categories: Part I (individual citizens and permanent residents, and partners), Part II (companies incorporated in Malaysia), and Part III (non-citizens). The longer you hold the property, the lower the rate — a design intended to curb short-term speculation.

| Holding period | Part I — Citizens / PR | Part II — Malaysian companies | Part III — Non-citizens |
|---|---|---|---|
| Within years 1–3 | 30% | 30% | 30% |
| Year 4 | 20% | 20% | 30% |
| Year 5 | 15% | 15% | 30% |
| Year 6 and beyond | 0% | 10% | 10% |

An important point for individual citizens: according to LHDN's rate schedule, effective **1 January 2022**, the rate for Part I reverted to **0%** for disposals after the fifth year (previously 5% for the 2019–2021 period). This means a citizen who has held their house for more than five years is no longer charged any RPGT on that gain.

Conversely, non-citizens and foreign companies face a heavier burden — 30% throughout the first five years, and never dropping below 10%.

## What exemptions can I claim?

Although the rates may look high, several important exemptions can reduce or eliminate the tax:

- **General individual exemption:** Every individual is entitled to exempt **RM10,000 or 10% of the chargeable gain, whichever is higher**, for each disposal.
- **Once-in-a-lifetime exemption:** An individual citizen or permanent resident may elect to exempt the gain from the disposal of **one residential home**, once only in their lifetime. This exemption must be claimed deliberately — it is not applied automatically.
- **Transfer by way of love and affection:** A transfer of property between husband and wife, parent and child, or grandparent and grandchild is fully exempt, provided the disposer is a Malaysian citizen.
- **Gifts and compulsory acquisition:** Gifts to the government or an approved charitable body, as well as the compulsory acquisition of land by the authorities, are also exempt.

A simple example: a citizen buys an apartment at RM400,000 and sells it in the third year for RM550,000, with allowable expenses of RM20,000. The gross gain is RM130,000. The general exemption (10% × RM130,000 = RM13,000) reduces the chargeable gain to RM117,000. At the third-year rate (30%), the RPGT payable is RM35,100 — unless the once-in-a-lifetime exemption is elected to eliminate it entirely.

## How are shares in a real property company handled now?

This is where the landscape has changed significantly. Before 2024, the disposal of shares in a real property company by all types of disposer was subject to RPGT. Capital Gains Tax (CGT) took effect on **1 January 2024**, but its imposition on the disposal of shares (including RPC shares) by **companies, limited liability partnerships, trust bodies and co-operatives** took effect on **1 March 2024** under a new income category in the Income Tax Act 1967.

According to EY Malaysia, under CGT the rate is **10% on the net gain**, with the option to pay **2% on the gross sale price** for shares acquired before 1 January 2024. Individuals, however, **remain under RPGT** when disposing of RPC shares — as do certain Labuan entities.

In short: the disposal of **physical real property** remains under RPGT for everyone, but the disposal of **RPC shares by corporate entities** is now under CGT. The [Capital Gains Tax](capital-gains-tax) article explains this new regime in more detail.

## Who must file, and when?

RPGT involves **two parties** — the seller (disposer) and the buyer (acquirer) — and both have responsibilities. From 1 January 2025, all forms must be submitted electronically through the **e-CKHT** module on the MyTax portal; manual submission is no longer accepted. The system has also shifted to the **Self-Assessment System (STS)**, under which the form filed by the seller is accepted directly as the official assessment.

| Party | Form | Deadline |
|---|---|---|
| Disposer (seller) | CKHT 1A (property), CKHT 1B (shares), CKHT 3 (exemption/loss claim) | 60 days from date of disposal |
| Acquirer (buyer) | CKHT 2A | 60 days from date of acquisition |

The buyer is also required to **withhold a portion of the sale proceeds** and remit it to the Inland Revenue Board under Section 21B. According to LHDN, the retention rate depends on the seller's category:

- Part I (individual citizens/PR): **3%**
- Part II (companies): **5%** if the disposal is within 3 years; **3%** for year 4 and beyond
- Part III (non-citizens): **7%**

From 2025, the balance of tax must be settled within **90 days of the date of disposal**. Failure to pay within this period results in a **10% increase** on the outstanding amount. Related records must be kept for **seven years** from the end of the year of assessment.

## What's next

- **Before selling:** calculate your estimated chargeable gain and check the holding year — waiting until after the fifth year can lower your RPGT rate to 0% if you are a citizen.
- **Determine the correct regime:** if you are disposing of shares rather than physical property, confirm whether RPGT or [Capital Gains Tax](capital-gains-tax) applies based on your status (individual vs corporate entity).
- **Keep up with the forms:** check the current CKHT 1A/1B/2A/3 form requirements and the 60/90-day deadlines directly on the e-CKHT portal of the [Inland Revenue Board](lhdn), as retention rates and procedures can change through the annual Finance Act.
- **Get professional advice:** for high-value disposals, family transfers, or once-in-a-lifetime exemption claims, consult a property lawyer or registered tax agent to verify the calculation and supporting documents.

*Note: This article is an AI-generated draft for general information purposes and is not tax or legal advice. Verify the latest figures and procedures with the Inland Revenue Board before acting.*

## Sources

- CKHT (Cukai Keuntungan Harta Tanah) — pengenalan, sejarah & peralihan CGT — https://www.hasil.gov.my/en/ckht/ (Lembaga Hasil Dalam Negeri Malaysia)
- Kadar Cukai Keuntungan Harta Tanah (Jadual 5) — https://www.hasil.gov.my/ckht/kadar-cukai-keuntungan-harta-tanah/ (Lembaga Hasil Dalam Negeri Malaysia)
- Pegangan Dan Remitan Wang Oleh Pemeroleh (Seksyen 21B) — https://www.hasil.gov.my/ckht/pegangan-dan-remitan-wang-oleh-pemeroleh/ (Lembaga Hasil Dalam Negeri Malaysia)
- Tanggungjawab Pelupus Dan Pemeroleh — CKHT — https://www.hasil.gov.my/en/ckht/tanggungjawab-pelupus-dan-pemeroleh/ (Lembaga Hasil Dalam Negeri Malaysia)
- Garis Panduan Operasi Cukai Keuntungan Harta Tanah Tahun 2025 — https://www.hasil.gov.my/wp-content/uploads/20250113-garis-panduan-operasi-ckht-tahun-2025.pdf (Lembaga Hasil Dalam Negeri Malaysia)
- Malaysia's new capital gains tax regime — your questions answered — https://www.ey.com/en_my/technical/tax-alerts/malaysias-new-capital-gains-tax-regime-your-questions-answered (EY Malaysia)

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