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By Jason Lim, REN 84424 · IQI Realty · Checked on 13 November 2026
This guide is for Johor property owners, investors and family businesses that hold property through a company, or are thinking of buying a company that owns property. The short answer: a real property company (RPC) is a controlled company whose land and RPC shares make up at least 75% of its total tangible assets at market value. Selling RPC shares is taxed as if you sold property, so individuals pay real property gains tax (RPGT), while companies that sell RPC shares have fallen under capital gains tax since 2024. Buying the shares instead of the property mainly changes the stamp duty and what you take on with the company. Not tax, legal or financial advice.
Quick answer
- Controlled company: broadly, not more than 50 members and controlled by not more than five persons (LHDN, citing the Income Tax Act).
- 75% test: the company is an RPC if its real property (at market value) and any RPC shares it holds are at least 75% of its total tangible assets.
- Tax on selling RPC shares: individuals pay RPGT at the same rates as for property; companies, LLPs, trusts and co-operatives pay capital gains tax under the Income Tax Act instead (LHDN guideline, 21 September 2026).
- Once chargeable, stays chargeable: RPC shares remain chargeable assets even if the company later stops being an RPC.
- Stamp duty: unlisted shares are stamped at RM3 per RM1,000 of the price or value, whichever is higher; property transfers pay 1% to 4%, or 8% for residential property bought by a foreign company or a non-citizen, non-PR individual from 2026.
- Foreign buyers: using a company does not remove Johor’s rules for foreign interests.
What makes a company a real property company
LHDN’s page on RPC shares sets out three conditions, all of which must be met:
| Condition | What it means | Where it comes from |
|---|---|---|
| A controlled company | Not more than 50 members and controlled by not more than five persons | Income Tax Act 1967, sections 2 and 139, as summarised by LHDN |
| Owns real property, RPC shares or both | Land or buildings in Malaysia, or shares in another RPC | RPGT Act 1976, Schedule 2, paragraph 34A |
| The 75% test | Real property at market value plus RPC shares at their acquisition price are not less than 75% of the value of total tangible assets | RPGT Act 1976, Schedule 2, paragraph 34A |
The rule has applied since 21 October 1988, when paragraph 34A was introduced. Its purpose is simple: without it, an owner could sell the shares of a company that holds a building and avoid the tax that would apply to selling the building itself.
A worked example of the 75% test
| Company | Property at market value | Cash and other tangible assets | Property share of tangible assets | RPC? |
|---|---|---|---|---|
| A: holds a JB shop office and a little cash | RM3,000,000 | RM700,000 | About 81% | Yes, if also a controlled company |
| B: a trading company that owns its warehouse | RM2,000,000 | RM2,500,000 (stock, receivables, cash) | About 44% | No, on these figures |
How RPC shares are taxed when they are sold
LHDN treats acquiring or disposing of RPC shares as acquiring or disposing of a chargeable asset. Key points from its RPC page:
- They stay chargeable. Shares acquired while the company was an RPC remain chargeable even if it is no longer one when you sell. Shares bought before it became an RPC are not chargeable until it does.
- Losses are ring-fenced. A loss on RPC shares cannot be set against gains on other assets, including other RPC shares.
- The individual exemption. Individuals can deduct RM10,000 or 10% of the chargeable gain, whichever is greater (LHDN exemption page). Companies cannot.
- No residence exemption. The once-in-a-lifetime exemption is for a private residence the individual owns, so it does not fit a home held through a company.
RPGT rates for disposals from 2022
| When you dispose | Citizens and PRs (Part I) | Malaysian companies (Part II) | Non-citizens and foreign companies (Part III) |
|---|---|---|---|
| Within 3 years of acquiring | 30% | 30% | 30% |
| In the 4th year | 20% | 20% | 30% |
| In the 5th year | 15% | 15% | 30% |
| In the 6th year or later | 0% | 10% | 10% |
For individual shareholders, these are the rates on a gain from RPC shares. For companies, the table now matters mainly when the company sells the property itself.
Companies selling RPC shares: capital gains tax since 2024
LHDN’s guideline on capital gains tax on unlisted shares (21 September 2026) says gains from disposals of RPC shares by companies, limited liability partnerships, trusts and co-operatives are no longer under the RPGT Act from 1 January 2024; they fall under the Income Tax Act. The tax applies to disposals from 1 March 2024. For shares acquired before 1 January 2024, the seller can choose 10% of the net gain or 2% of the gross disposal price; for shares acquired from 2024, it is 10% of the net gain. The same guideline also catches shares in a foreign-incorporated controlled company whose Malaysian property and similar shares make up at least 75% of its qualifying assets.
The buyer’s duty to retain part of the price
Under section 21B of the RPGT Act, the buyer in a chargeable disposal paid in money must retain part of the price and pay it to LHDN within 60 days of the disposal date. LHDN’s page, updated 25 May 2026, gives these rates by the seller’s category:
| Seller | Amount to retain |
|---|---|
| Citizen or PR individual (Part I) | 3% |
| Malaysian company, disposing within 3 years (Part II) | 5% |
| Malaysian company, disposing in the 4th year or later (Part II) | 3% |
| Non-citizen or foreign company (Part III) | 7% |
In a share deal, ask your adviser early whether the retention applies to your transaction, because a company seller of RPC shares is now under capital gains tax rather than RPGT.
Holding property through a company?
Tell me the property, how it is held and what you are considering: selling the property, selling the shares or buying a company. I’ll explain the property side and recorded prices, and work alongside your lawyer and tax adviser.
WhatsApp JasonBuying the property, buying through a company, or buying RPC shares
| Buy in your own name | Your company buys the property | Buy the shares of an RPC | |
|---|---|---|---|
| Who is on the title | You | Your company | The RPC stays the owner; only shareholders change |
| Stamp duty on the purchase | 1% to 4% scale on price or market value; 8% on residential for non-citizen, non-PR buyers | Same scale; 8% on residential if it is a foreign company | RM3 per RM1,000 of the share price or value, whichever is higher |
| Tax when you exit | RPGT Part I or III; 0% for citizens and PRs from year 6 | RPGT Part II; 10% from year 6 | Individuals: RPGT on the shares. Companies: capital gains tax |
| Rental income | Personal income tax rates | Company rates: for qualifying smaller companies, 15% on the first RM150,000 and 17% up to RM600,000 (Budget 2027 proposes 14% and 16% from YA2027), then 24%; 24% for other companies | Taxed in the RPC |
| What else you take on | The property only | Company running costs and filings | The company’s whole history: debts, tax, disputes, contracts |
The stamp duty gap between 0.3% on shares and up to 4% or 8% on a transfer is why share deals come up. But LHDN stamps unlisted shares on the higher of price or value, and refers to methods such as net tangible assets in its guideline, so a company holding valuable land does not get a nominal figure. A share buyer also inherits everything inside the company, so the checks are much wider than a title search. My guides to buying property through a company, stamp duty in 2026 and stamp duty adjudication and valuation appeals cover the details.
Foreign buyers and Johor rules
- Residential units. The Ministry of Economy’s Guideline on the Acquisition of Properties (effective 13 July 2022) leaves residential units bought by foreign interests at RM1 million or more each to the state authority, and says foreign interests may not buy property below RM1 million per unit. In Johor the RM1 million floor applies with only limited exceptions (for example, some serviced apartments sold by developers with state approval); no area is exempt as a whole. See Johor’s foreigner minimum price.
- State consent. Non-citizens and foreign companies need state approval to acquire land; see state consent in Johor. Whether a share deal triggers similar rules depends on who ends up controlling the company, so ask a lawyer before you sign.
- No shortcuts. Using a company or a local nominee to get round these rules is risky and can leave you with no enforceable rights; see nominee ownership risks.
- Source of funds. Expect the lawyer and the bank to ask where the money comes from; see source of funds checks.
Checklist before buying RPC shares
- Title search on every property the company owns: owner, charges, caveats, restrictions and land use.
- Audited accounts and tax position: unpaid tax, RPGT history, and how LHDN is likely to value the shares for stamp duty.
- Debts and guarantees: loans secured on the property and any guarantees the company gave.
- Tenancies and contracts: leases, service contracts and staff, if any.
- Disputes: court cases, strata or council notices, and outstanding quit rent and assessment.
- The share sale agreement: warranties and indemnities from the sellers, and who pays the stamp duty and any retention.
If you plan to leave Malaysia while holding shares or property, read tax clearance for owners leaving Malaysia. For selling costs in general, see what sellers pay and my RPGT guide.
Where to buy if this matters to you
Company ownership is most common for shop offices, small commercial buildings and investment units. These area guides cover the main JB markets:
- JB Sentral and Bukit Chagar: the city centre, with older commercial blocks and newer towers.
- Mount Austin: shop offices and condos in an established commercial area.
- Iskandar Puteri: newer commercial and residential projects under MBIP.
- Tebrau, Setia Indah and Molek: mature neighbourhoods with commercial strips.
- Kulai and Senai: larger plots near the airport and industrial areas.
Compare them on my JB property map.
More Johor living guides: Buying property through a company · RPGT guide · Stamp duty in 2026 · Corporate tenancies · Company or personal name · Spreading risk across properties · Checks when buying from a company
Frequently asked questions
What is a real property company in Malaysia?
A controlled company, broadly one with not more than 50 members controlled by not more than five persons, whose real property at market value and any RPC shares it holds make up at least 75% of its total tangible assets. The definition is in paragraph 34A of Schedule 2 to the RPGT Act 1976.
Is RPGT payable when I sell RPC shares?
Yes, if you are an individual: LHDN treats the disposal of RPC shares as the disposal of a chargeable asset, at the same RPGT rates as property. Since 2024, companies, LLPs, trusts and co-operatives that sell RPC shares pay capital gains tax under the Income Tax Act instead.
How is the 75% test for an RPC worked out?
Add the market value of the company’s real property and the acquisition price of any RPC shares it holds, then compare that with the value of its total tangible assets. If it is 75% or more and the company is a controlled company, it is an RPC. Intangible assets are left out.
What stamp duty applies when buying RPC shares?
Transfers of unlisted shares are stamped at RM3 per RM1,000 of the price or value, whichever is higher, under LHDN’s June 2026 guideline. A direct property transfer pays the 1% to 4% scale, or 8% on residential property bought by a foreign company or a non-citizen, non-PR individual.
Should I buy property in my own name or through a company?
It depends on your plans. Individuals who are citizens or PRs pay 0% RPGT from the sixth year and can use the private residence exemption, while a Malaysian company pays 10% from the sixth year but may suit a business or a group of investors. Get tax and legal advice for your case.
Can a foreigner buy Johor property through a Malaysian company?
Using a company does not remove the rules for foreign interests. Foreign companies need state approval to acquire land, Johor’s minimum price for foreign buyers still applies, and nominee arrangements are risky. Ask a Malaysian lawyer before setting up any structure.
Buying or selling property held by a company?
Tell me the property, how it is held and your plans. I will share recorded prices for similar properties, help you understand what the market would pay for the property itself, and work alongside your lawyer and tax adviser on the sale or purchase. You can also book an appointment, or a Zoom consultation if you are abroad.
Sources: LHDN, Shares in Real Property Company (RPC), checked November 2026; LHDN, Kadar Cukai Keuntungan Harta Tanah (RPGT rates), updated 23 June 2026; LHDN, retention and remittance of money by the acquirer, updated 25 May 2026; LHDN, RPGT exemptions (Schedule 4 and private residence), checked November 2026; LHDN, Real Property Gains Tax Act 1976 (Act 169), online version as at 1 January 2026, section 21B; LHDN, Garis Panduan Cukai Keuntungan Modal bagi Saham Tidak Tersenarai (capital gains tax on unlisted shares), 21 September 2026; LHDN, Garis Panduan Pengenaan Duti Setem, First Schedule, Stamp Act 1949 (Item 32), 30 June 2026; LHDN, company tax rates, updated 25 June 2026; Ministry of Economy, Garis Panduan Perolehan Hartanah (Guideline on the Acquisition of Properties), effective 13 July 2022
Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 13 November 2026, not tax, legal or financial advice. RPC status depends on values at a given date and on the company’s facts; confirm with a licensed tax adviser, a lawyer and LHDN before you buy, sell or restructure.