RPGT calculation is not complicated. It is a five-step formula. But most property owners get it wrong — not because the math is hard, but because they forget to include allowable costs that reduce their taxable gain. Every ringgit of stamp duty, legal fees, and renovation you can add to your acquisition price is a ringgit less in chargeable gain. Over a 20% or 30% RPGT rate, those "small" deductions add up to thousands.
This guide walks through the exact calculation process, step by step, with three complete worked examples covering different scenarios: a Malaysian citizen selling in year 4, a foreigner selling in year 6, and a company selling in year 3.
The RPGT Formula
RPGT = (Disposal Price - Acquisition Price - Exemptions) x RPGT Rate
That is the simplified version. In practice, there are five distinct steps, and each step has specific rules about what counts and what does not.
Step 1: Determine the Adjusted Disposal Price
The disposal price is not simply "the amount you sold for." It is the sale price minus allowable disposal costs.
Disposal Price = Sale Price - Allowable Disposal Costs
What Counts as an Allowable Disposal Cost
| Cost | Deductible? | Notes |
|---|---|---|
| Agent/negotiator commission | Yes | Typically 2-3% of sale price |
| Legal fees for the sale (SPA preparation) | Yes | Seller's lawyer fees |
| SST on legal fees | Yes | The 6% service tax on lawyer fees |
| Advertising costs to sell | Yes | If you marketed the property yourself |
| Valuation fee (for the sale) | Yes | If a valuation was required |
| Renovation to increase sale price | No | Renovation is added to acquisition price, not deducted from disposal |
| RPGT filing cost | No | Administrative, not a disposal cost |
Example: You sell a property for RM800,000. Agent commission is 2% (RM16,000). Legal fees are RM5,000. SST on legal fees is RM300.
Adjusted Disposal Price = RM800,000 - RM16,000 - RM5,000 - RM300 = RM778,700
Step 2: Determine the Adjusted Acquisition Price
This is where most people leave money on the table. The acquisition price includes the purchase price plus all allowable incidental costs incurred to acquire, improve, and maintain the property.
Acquisition Price = Purchase Price + Allowable Acquisition Costs + Improvement Costs
What Counts as an Allowable Acquisition Cost
| Cost | Deductible? | Notes |
|---|---|---|
| Purchase price (SPA price) | Yes | The base amount |
| Stamp duty on SPA | Yes | Often overlooked |
| Stamp duty on MOT | Yes | Often overlooked |
| Stamp duty on loan agreement | Yes | Often overlooked |
| Legal fees for SPA | Yes | Buyer's lawyer fees at purchase |
| Legal fees for loan agreement | Yes | Often overlooked |
| Legal fees for MOT | Yes | |
| SST on all legal fees | Yes | |
| Agent commission on purchase (if any) | Yes | Rare for buyer to pay, but deductible if they did |
| Valuation fee at purchase | Yes | Bank's panel valuer cost |
| Real estate agent referral fee | Yes | If you paid one |
What Counts as an Improvement (Enhancement) Cost
| Cost | Deductible? | Notes |
|---|---|---|
| Renovation costs | Yes | Must be permanent improvements, not repairs |
| Extension or additional built-up area | Yes | Adding a room, enclosing a porch |
| Kitchen renovation (built-in cabinets, etc.) | Yes | Permanent fixtures |
| Bathroom renovation | Yes | Permanent fixtures |
| Electrical rewiring (upgrade) | Yes | Must be an improvement, not maintenance |
| Flooring replacement (upgrade) | Yes | e.g., replacing vinyl with marble |
| RPGT retention sum (if applicable) | No | This is a tax mechanism, not a cost |
What Does NOT Count
| Cost | Deductible? | Why Not |
|---|---|---|
| Maintenance fees | No | Recurring expense, not acquisition/improvement |
| Insurance premiums | No | Recurring expense |
| Property tax / quit rent / assessment | No | Recurring expense |
| Mortgage interest | No | Financing cost, not acquisition cost |
| Furniture and fittings (movable) | No | Not permanent improvements |
| Repairs and maintenance | No | Maintaining existing condition, not improving |
| Utility bills | No | Recurring expense |
The distinction between "renovation" (deductible) and "repair" (not deductible) is critical. Installing new built-in wardrobes is a renovation. Fixing a broken wardrobe hinge is a repair. Re-tiling a bathroom with upgraded tiles is a renovation. Replacing one cracked tile with the same type is a repair. Keep invoices and receipts for all renovation work — they directly reduce your RPGT.
Step 3: Calculate the Chargeable Gain
Chargeable Gain = Adjusted Disposal Price - Adjusted Acquisition Price
If the result is negative, there is no chargeable gain. No RPGT is payable. You should still file the CKHT return within 60 days.
If the result is positive, proceed to Step 4.
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Step 4: Apply Exemptions
For Malaysian citizens and permanent residents, deduct the greater of:
- RM10,000, or
- 10% of the chargeable gain
This exemption is automatic and applies to every disposal (except where the once-in-lifetime exemption is claimed instead).
Net Chargeable Gain = Chargeable Gain - Exemption
For companies and foreigners: no automatic exemption. The full chargeable gain is taxable.
Step 5: Apply the RPGT Rate
The rate depends on the holding period and the category of the disposer.
Holding Period
The holding period is calculated from the date of the SPA for acquisition to the date of the SPA for disposal. Not from the date of MOT registration. Not from the date of loan disbursement. From SPA to SPA.
| Disposal within | Years from Acquisition SPA |
|---|---|
| Year 1 | 0 to 1 year |
| Year 2 | 1 to 2 years |
| Year 3 | 2 to 3 years |
| Year 4 | 3 to 4 years |
| Year 5 | 4 to 5 years |
| Year 6+ | More than 5 years |
2026 RPGT Rate Table
| Disposal Period | Citizens & PRs | Companies | Foreigners |
|---|---|---|---|
| Year 1 | 30% | 30% | 30% |
| Year 2 | 30% | 30% | 30% |
| Year 3 | 30% | 30% | 30% |
| Year 4 | 20% | 20% | 30% |
| Year 5 | 15% | 15% | 30% |
| Year 6+ | 0% | 10% | 10% |
RPGT Payable = Net Chargeable Gain x Applicable Rate
Worked Example 1: Malaysian Citizen Selling in Year 4
Facts:
- Ahmad (Malaysian citizen) bought a condo in Bangsar for RM650,000 in March 2022
- He spent RM35,000 on renovation (built-in kitchen cabinets, bathroom upgrade, new flooring)
- He sells in June 2026 for RM850,000 through an agent (2.5% commission)
Step 1: Adjusted Disposal Price
| Item | Amount (RM) |
|---|---|
| Sale price | 850,000 |
| Less: Agent commission (2.5%) | (21,250) |
| Less: Legal fees (seller's SPA) | (5,000) |
| Less: SST on legal fees | (300) |
| Adjusted Disposal Price | 823,450 |
Step 2: Adjusted Acquisition Price
| Item | Amount (RM) |
|---|---|
| Purchase price | 650,000 |
| Stamp duty (MOT) | 14,000 |
| Stamp duty (loan, 0.5% x RM585K) | 2,925 |
| Legal fees (SPA) | 7,750 |
| Legal fees (loan agreement) | 7,063 |
| Legal fees (MOT) | 7,750 |
| SST on legal fees (6%) | 1,354 |
| Valuation fee | 800 |
| Renovation | 35,000 |
| Adjusted Acquisition Price | 726,642 |
Step 3: Chargeable Gain
| Calculation | Amount (RM) |
|---|---|
| Adjusted Disposal Price | 823,450 |
| Less: Adjusted Acquisition Price | (726,642) |
| Chargeable Gain | 96,808 |
Step 4: Apply Exemption
| Exemption | Amount (RM) |
|---|---|
| 10% of chargeable gain | 9,681 |
| RM10,000 | 10,000 |
| Exemption (greater of) | 10,000 |
| Net Chargeable Gain | 86,808 |
Step 5: Apply Rate
| Factor | Value |
|---|---|
| Holding period | March 2022 to June 2026 = 4 years 3 months = Year 5 |
| Rate (citizen, year 5) | 15% |
| RPGT Payable | RM13,021 |
Note: The holding period is 4 years and 3 months. This falls within "year 5" (4 to 5 years from acquisition). If Ahmad waits until April 2027 (past the 5-year mark), the rate drops to 0%. That is a RM13,021 saving for waiting 10 months.
Worked Example 2: Foreigner Selling in Year 6
Facts:
- Sarah (Singaporean, non-PR) bought a condo in Johor Bahru for RM500,000 in January 2020
- No renovation done
- She sells in March 2026 for RM620,000 through an agent (2% commission)
Step 1: Adjusted Disposal Price
| Item | Amount (RM) |
|---|---|
| Sale price | 620,000 |
| Less: Agent commission (2%) | (12,400) |
| Less: Legal fees (seller) | (4,000) |
| Less: SST on legal fees | (240) |
| Adjusted Disposal Price | 603,360 |
Step 2: Adjusted Acquisition Price
| Item | Amount (RM) |
|---|---|
| Purchase price | 500,000 |
| Stamp duty (MOT) | 9,000 |
| Stamp duty (loan, 0.5% x RM350K) | 1,750 |
| Legal fees (SPA + loan + MOT) | 16,875 |
| SST on legal fees | 1,013 |
| Valuation fee | 500 |
| Adjusted Acquisition Price | 529,138 |
Step 3: Chargeable Gain
| Calculation | Amount (RM) |
|---|---|
| Adjusted Disposal Price | 603,360 |
| Less: Adjusted Acquisition Price | (529,138) |
| Chargeable Gain | 74,222 |
Step 4: Apply Exemption
Foreigners are not eligible for the automatic 10%/RM10K exemption.
Net Chargeable Gain = RM74,222
Step 5: Apply Rate
| Factor | Value |
|---|---|
| Holding period | January 2020 to March 2026 = 6 years 2 months = Year 7 |
| Rate (foreigner, year 6+) | 10% |
| RPGT Payable | RM7,422 |
If Sarah had sold in December 2024 (within year 5), the rate would have been 30% — resulting in RM22,267 in RPGT. Waiting until year 6 saved her approximately RM14,845.
Worked Example 3: Company Selling in Year 3
Facts:
- XYZ Sdn Bhd purchased a shophouse in Penang for RM1,200,000 in July 2023
- Renovation: RM80,000 (commercial fit-out)
- Sold in May 2026 for RM1,450,000, no agent (direct sale)
Step 1: Adjusted Disposal Price
| Item | Amount (RM) |
|---|---|
| Sale price | 1,450,000 |
| Less: Legal fees (seller) | (8,000) |
| Less: SST on legal fees | (480) |
| Adjusted Disposal Price | 1,441,520 |
Step 2: Adjusted Acquisition Price
| Item | Amount (RM) |
|---|---|
| Purchase price | 1,200,000 |
| Stamp duty (MOT) | 32,000 |
| Stamp duty (loan, 0.5% x RM840K) | 4,200 |
| Legal fees (SPA + loan + MOT) | 46,000 |
| SST on legal fees | 2,760 |
| Valuation fee | 1,200 |
| Renovation | 80,000 |
| Adjusted Acquisition Price | 1,366,160 |
Step 3: Chargeable Gain
| Calculation | Amount (RM) |
|---|---|
| Adjusted Disposal Price | 1,441,520 |
| Less: Adjusted Acquisition Price | (1,366,160) |
| Chargeable Gain | 75,360 |
Step 4: Apply Exemption
Companies are not eligible for the automatic exemption.
Net Chargeable Gain = RM75,360
Step 5: Apply Rate
| Factor | Value |
|---|---|
| Holding period | July 2023 to May 2026 = 2 years 10 months = Year 3 |
| Rate (company, year 3) | 30% |
| RPGT Payable | RM22,608 |
Had XYZ Sdn Bhd waited until August 2026 (year 4), the rate would be 20% — saving RM7,536. And even at maximum holding period (year 6+), companies still pay 10%. The company can never reach 0%.
Common Mistakes in RPGT Calculation
Mistake 1: Forgetting to Add Renovation Costs
Renovation is the most commonly overlooked allowable cost. Many property owners renovate their units before renting, then forget to include the cost when calculating RPGT years later. At a 30% rate, a RM50,000 renovation reduces your RPGT by RM15,000.
Prevention: Keep all renovation invoices and receipts in a dedicated file from day one. Photograph the before and after of each renovation.
Mistake 2: Using the Wrong Date for Holding Period
The holding period is measured from SPA date to SPA date — not from:
- VP date
- MOT registration date
- Loan disbursement date
- Key collection date
The SPA is the legal point of acquisition and disposal. Getting this wrong by even a few months can push you into a different rate bracket.
Mistake 3: Not Including Stamp Duty in Acquisition Price
Many people include the purchase price and legal fees but forget that stamp duty (both MOT and loan agreement stamp duty) is an allowable acquisition cost. On an RM800,000 property, the combined stamp duty can be RM20,000+.
Mistake 4: Claiming the Wrong Exemption Category
Citizens sometimes claim the once-in-lifetime exemption on a small gain when they could have used the automatic 10% exemption and saved the once-in-lifetime for a larger future disposal. Conversely, some forget the once-in-lifetime exemption exists and pay RPGT on their private residence unnecessarily.
Mistake 5: Filing Late
The CKHT return must be filed within 60 days of the SPA date for the disposal. Late filing penalties are:
| Delay | Penalty |
|---|---|
| First 30 days late | 10% of RPGT payable |
| Beyond 30 days | Additional penalties at LHDN's discretion |
Your lawyer should handle the filing, but verify the deadline and follow up.
Quick Reference: RPGT Rate Summary
| Category | Year 1-3 | Year 4 | Year 5 | Year 6+ | Auto Exemption |
|---|---|---|---|---|---|
| Citizen | 30% | 20% | 15% | 0% | 10% or RM10K |
| PR | 30% | 20% | 15% | 0% | 10% or RM10K |
| Company | 30% | 20% | 15% | 10% | None |
| Foreigner | 30% | 30% | 30% | 10% | None |
RPGT Retention by Buyer
When you sell a property, the buyer (or their lawyer) is required to retain a portion of the purchase price and remit it directly to LHDN as a provisional RPGT payment. This ensures the government collects the tax.
| Category of Seller | Retention Rate |
|---|---|
| Citizen / PR | 3% of sale price |
| Company / Foreigner | 7% of sale price |
If the actual RPGT payable is less than the retained amount, LHDN refunds the difference after processing. If it is more, you pay the balance.