Also in: Bahasa Melayu
This is for anyone selling a property in Malaysia in late 2026, Malaysian or foreign. The short answer: real property gains tax (RPGT) is charged on your profit, not your selling price, at 30% if you sell within three years, falling to nil for Malaysian individuals from the sixth year. Foreigners pay 30% for the first five years. Below I work through three sales line by line.
RPGT rates in force in 2026
The rates depend on who you are and how long you have owned the property. The holding period runs from the date you acquired it to the date you dispose of it; where there is a written agreement, PwC’s tax booklet says the date of that agreement is the disposal date.
| Year of disposal | Malaysian citizens and PRs | Malaysian companies | Foreigners and foreign companies |
|---|---|---|---|
| Within 3 years | 30% | 30% | 30% |
| 4th year | 20% | 20% | 30% |
| 5th year | 15% | 15% | 30% |
| 6th year onwards | 0% | 10% | 10% |
The nil rate for Malaysian individuals from the sixth year has applied since 1 January 2022. Budget 2027, tabled on 9 October 2026, did not propose any change to RPGT according to PwC’s overview, so these are the rates I expect for sales in the coming months. The budget’s property measures were on stamp duty, which I cover in my stamp duty article.
How the gain is worked out
RPGT is charged on the chargeable gain: the disposal price minus the acquisition price. Both figures are adjusted for costs, and this is where many sellers overpay because they forget their receipts.
- Acquisition price: what you paid, plus incidental costs of buying. LHDN lists legal fees, stamp duty and commission as examples.
- Disposal price: what you sold for, minus incidental costs of selling (agent’s commission, legal and valuation fees) and minus spending that enhanced or preserved the property’s value.
- Renovation: LHDN’s test is that the work must enhance or preserve the value and still be reflected at the time of sale. Routine repairs and repainting are unlikely to count.
- Not allowed: loan interest is not deductible, and spending that is deductible for income tax (for example against rental income) is left out, whether or not you claimed it.
Keep the SPA, the stamp duty receipts, lawyers’ invoices, agent invoices and contractor invoices with photos. LHDN expects records to be kept for seven years.
Two exemptions every Malaysian seller should know
- RM10,000 or 10%. Individuals get an exemption of RM10,000 or 10% of the chargeable gain, whichever is greater. It is applied automatically in the calculation, and LHDN’s page does not limit it to citizens.
- The private residence exemption. A Malaysian citizen or PR can exempt the gain on one private residence, once in a lifetime. The election is in writing and cannot be withdrawn. Because you only get one, I usually suggest saving it for a sale with a large gain inside the first five years rather than using it on a small one.
Transfers between spouses, and gifts between parents and children or grandparents and grandchildren, are treated as no gain and no loss where the giver is a citizen. My property tax guide puts these taxes side by side.
The retention sum and the 60-day deadlines
When you sell, the buyer’s lawyer holds back part of the price and pays it to LHDN. This is a prepayment against your tax, not the tax itself. According to LHDN’s page, last updated in June 2026:
| Seller | Retention |
|---|---|
| Malaysian citizen or PR | 3% of the price |
| Malaysian company, sold within 3 years | 5% |
| Malaysian company, 4th year onwards | 3% |
| Foreigner or foreign company | 7% |
- The buyer files form CKHT 2A and remits the retention within 60 days.
- You, the seller, file CKHT 1A within 60 days of the disposal, or CKHT 3 if you are claiming an exemption or the sale is not chargeable.
- Any RPGT due must be paid within 90 days of the disposal, under the self-assessment rules that apply from year of assessment 2025.
- Since 1 January 2025, all forms must go through e-CKHT on MyTax. Paper forms are treated as not submitted. Your lawyer can file for you.
- Late remittance by the buyer attracts a 10% increase.
PwC’s booklet says the buyer withholds the lowest of the whole cash price, the percentage above, or your self-assessed RPGT. L & Co reports that the self-assessed option applies from 1 January 2026 where the seller has notified that figure in advance. If your tax is likely to be small or nil, ask your lawyer about this early, before completion.
Worked example 1: Malaysian sells in year 3
Aisyah, a Malaysian, bought a condo for RM400,000 and sells it within three years for RM480,000. All figures are rounded for illustration.
| Item | Amount |
|---|---|
| Selling price | RM480,000 |
| Less selling costs (agent, legal) | RM16,000 |
| Less built-in additions still in place | RM20,000 |
| Disposal price | RM444,000 |
| Purchase price plus buying costs (legal, stamp duty) | RM412,000 |
| Chargeable gain | RM32,000 |
| Less exemption (greater of RM10,000 or 10%) | RM10,000 |
| Taxable gain at 30% | RM22,000 |
| RPGT payable | RM6,600 |
| 3% retained by the buyer’s lawyer | RM14,400 |
The RM14,400 retained is credited against her RM6,600 tax, so the balance of RM7,800 comes back to her after LHDN processes the return. If she chose to use her once-in-a-lifetime private residence exemption here, the RPGT would be nil, but she would lose it for good.
Worked example 2: the same Malaysian sells in year 6
If Aisyah waits until the sixth year and sells for the same price, the rate for Malaysian individuals is 0%. Her RPGT is nil and she keeps her private residence exemption for later.
She still has to file the return within 60 days, and 3% is still the default retention. Any amount retained is credited back to her, but expect that cash to be tied up for a while.
Worked example 3: foreigner sells in year 4
Mr Tan, a Singaporean, bought a house in Johor Bahru for RM1,000,000 and sells in the fourth year for RM1,150,000.
| Item | Amount |
|---|---|
| Selling price | RM1,150,000 |
| Less selling costs (agent, legal) | RM35,000 |
| Disposal price | RM1,115,000 |
| Purchase price plus buying costs (legal, stamp duty) | RM1,045,000 |
| Chargeable gain | RM70,000 |
| Less exemption (greater of RM10,000 or 10%) | RM10,000 |
| Taxable gain at 30% | RM60,000 |
| RPGT payable | RM18,000 |
| 7% retained by the buyer’s lawyer | RM80,500 |
The point here is cash flow. Mr Tan’s tax is RM18,000, but RM80,500 is held back. Unless his lawyer arranges for the buyer to remit the lower self-assessed figure, RM62,500 waits on a refund. For a foreign owner, holding until the sixth year cuts the rate from 30% to 10%.
Before you sign the sale agreement
- Check the date on your purchase SPA and work out exactly which year your sale falls in. A few weeks can move you into a lower band.
- Gather every receipt for buying costs and value-adding work now, not after the sale.
- Decide with your lawyer whether to use the private residence exemption on this sale.
- Get a TIN and MyTax access ready so the e-CKHT filing is not delayed.
- If you are selling in Johor, my selling page explains how I handle the process.
Questions about your situation?
Send me your purchase date, price and expected selling price, and I will go through the likely RPGT with you.
Sources: LHDN (Inland Revenue Board), “Real Property Gains Tax (RPGT) Rates”, accessed October 2026; LHDN (Inland Revenue Board), “Responsibilities of the Disposer and Acquirer”, June 2026; LHDN (Inland Revenue Board), “Exemption”, accessed October 2026; LHDN (Inland Revenue Board), “Disposal Price & Acquisition Price”, accessed October 2026; LHDN (Inland Revenue Board), “CKHT / RPGT e-Book at a Glance”, 2023; PwC Malaysia, “2025/2026 Malaysian Tax Booklet: Capital gains tax and real property gains tax”, September 2026; L & Co, “Malaysia Real Property Gains Tax (RPGT) Operations Guide”, April 2026; The Borneo Post, “IRB: Mandatory e-CKHT submissions for RPGT forms begins Jan 1”, November 2024; PwC Malaysia, “Centre Stage: Budget 2027 overview”, October 2026
Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 12 October 2026, not legal, tax or financial advice.