Real Property Gain Tax (RPGT) is the tax you pay on profit from selling property in Malaysia. It is not complicated, but miscalculating it — or not knowing about the exemptions — can cost you thousands of ringgit unnecessarily.
This guide walks through the RPGT calculation step by step, with a worked example, the two exemption methods, the filing process using CKHT forms, and the 60-day payment timeline.
The RPGT Formula
The calculation has three stages:
1. Chargeable Gain = Disposal Price - Acquisition Price - Allowable Expenses
2. Taxable Gain = Chargeable Gain - Exemption
3. RPGT Payable = Taxable Gain × RPGT Rate
Each component has specific rules about what counts and what does not.
Step 1: Determine the Disposal Price
The disposal price is the selling price in your Sale and Purchase Agreement (SPA). Not the market valuation. Not the bank's valuation. The contractual SPA price.
Exception: For transactions between related parties (e.g., selling to a family member at below market value), LHDN may substitute the market value as determined by a registered valuer. This prevents artificial underpricing to reduce RPGT.
Step 2: Determine the Acquisition Price
The acquisition price is your original purchase price from the SPA when you bought the property — plus certain costs directly related to the acquisition:
| Included in Acquisition Price | Not Included |
|---|---|
| Purchase price in SPA | Mortgage interest |
| Legal fees for purchase | Monthly maintenance fees |
| Stamp duty on SPA | Insurance premiums |
| Stamp duty on loan agreement | Property management fees |
| Valuation fees for purchase | Furniture and fittings |
The acquisition price represents your total capital outlay to acquire the property, excluding financing costs and holding costs.
Step 3: Deduct Allowable Expenses
Allowable expenses are costs incurred to enhance the property or to execute the disposal:
Enhancement expenses (during holding period):
- Renovation that permanently improves the property — kitchen extensions, bathroom upgrades, built-in cabinetry, flooring replacement, electrical rewiring
- Must have original receipts and invoices
- Must be permanent improvements, not routine maintenance or repairs
Disposal expenses (at time of sale):
- Legal fees for the sale transaction
- Real estate agent commission (typically 2-3% of selling price)
- Valuation fees for the sale
- Advertising costs to sell the property
Not allowable:
- Routine repairs and maintenance (fixing leaks, repainting to original condition)
- Furniture, appliances, and movable fittings
- Mortgage interest payments
- Insurance premiums
- Quit rent and assessment rates
- Maintenance fees and sinking fund contributions
The distinction between renovation (deductible) and repair (not deductible) is important. Replacing a broken pipe is a repair. Repiping the entire unit with upgraded materials is renovation. LHDN applies this distinction strictly.
Step 4: Calculate the Chargeable Gain
Subtract acquisition price and allowable expenses from disposal price:
Chargeable Gain = Disposal Price - Acquisition Price - Allowable Expenses
If this number is negative, you have sold at a loss. No RPGT is payable, but you must still file the return.
Step 5: Apply the Exemption
For individuals (Malaysian citizens, permanent residents, and foreigners), LHDN applies an automatic exemption:
Exempt Amount = Greater of RM10,000 or 10% of Chargeable Gain
This is not a choice — LHDN automatically uses whichever is larger.
| Chargeable Gain | 10% of Gain | RM10,000 | Exemption Applied |
|---|---|---|---|
| RM50,000 | RM5,000 | RM10,000 | RM10,000 |
| RM100,000 | RM10,000 | RM10,000 | RM10,000 |
| RM150,000 | RM15,000 | RM10,000 | RM15,000 |
| RM300,000 | RM30,000 | RM10,000 | RM30,000 |
| RM500,000 | RM50,000 | RM10,000 | RM50,000 |
Companies do not qualify for this automatic exemption. They pay RPGT on the full chargeable gain.
Taxable Gain = Chargeable Gain - Exemption
Step 6: Apply the RPGT Rate
The rate depends on your holding period and residency status. For a complete rate table, see our RPGT complete guide.
Quick reference — Citizens & PRs:
- Years 1-3: 30%
- Years 4-5: 20%
- Year 6+: 0%
Quick reference — Foreigners:
- Years 1-5: 30%
- Year 6+: 10%
RPGT Payable = Taxable Gain × Applicable Rate
Worked Example: Full Calculation
Scenario: Mei Ling, a Malaysian citizen, bought a condo in Bangsar South in January 2022 for RM550,000. She sells it in March 2026 for RM720,000.
Holding Period
January 2022 to March 2026 = 4 years and 2 months. This falls in the year 5 bracket (within 5 years), so the rate is 20% for a Malaysian citizen.
Acquisition Price Calculation
| Item | Amount |
|---|---|
| Purchase price (SPA) | RM550,000 |
| Legal fees (purchase) | RM9,200 |
| Stamp duty (SPA) | RM10,500 |
| Stamp duty (loan agreement) | RM2,475 |
| Valuation fee | RM800 |
| Total Acquisition Price | RM572,975 |
Allowable Expenses
| Item | Amount |
|---|---|
| Kitchen renovation (receipts available) | RM18,000 |
| Bathroom upgrade (receipts available) | RM12,000 |
| Legal fees (sale) | RM7,500 |
| Agent commission (2.5% of RM720K) | RM18,000 |
| Total Allowable Expenses | RM55,500 |
RPGT Calculation
| Step | Calculation | Amount |
|---|---|---|
| Disposal Price | RM720,000 | |
| Less: Acquisition Price | RM572,975 | |
| Less: Allowable Expenses | RM55,500 | |
| Chargeable Gain | 720,000 - 572,975 - 55,500 | RM91,525 |
| Exemption (10% of gain) | 10% × 91,525 = RM9,152.50 | |
| Exemption (RM10,000 flat) | ||
| Exemption Applied (greater of the two) | RM10,000 | |
| Taxable Gain | 91,525 - 10,000 | RM81,525 |
| RPGT Rate (Year 5, citizen) | 20% | |
| RPGT Payable | 81,525 × 20% | RM16,305 |
If Mei Ling had waited until February 2028 (year 6+), her RPGT would be RM0. The RM16,305 saving over 22 months is worth calculating against the opportunity cost of holding.
See which properties hit your cashflow target — pre-screened with real yield data.
Get the Property Directory →The Once-in-Lifetime Exemption (Alternative to 10%/RM10K)
Malaysian citizens and PRs have an additional option: the once-in-lifetime private residence exemption. This exempts the entire chargeable gain — not just 10% or RM10,000, but the full amount.
Conditions:
- You must be a Malaysian citizen or PR
- The property must be your private residence
- You can only claim this once in your lifetime
In Mei Ling's example, if the Bangsar South condo was her primary residence, she could claim this exemption and pay RM0 RPGT regardless of the holding period. But she can never use this exemption again.
Strategic decision: If your chargeable gain is small (under RM100,000), consider whether the once-in-lifetime exemption is worth using. You may sell a more expensive property in the future with a larger gain. For the full analysis, read our RPGT exemption guide.
Filing Process — CKHT Forms
Who Files What
| Party | Form | Purpose |
|---|---|---|
| Seller (individual) | CKHT 1A | Declare disposal details and calculate RPGT |
| Seller (company) | CKHT 1B | Same as above, for companies |
| Buyer (individual) | CKHT 2A | Declare acquisition and confirm 3% retention |
| Seller (exemption claim) | CKHT 3 | Claim once-in-lifetime exemption |
Both seller and buyer must file. This is a joint obligation — both parties are independently required to submit their respective forms.
Where to File
- Online: MyTax portal via e-CKHT (recommended — faster processing)
- In person: Any LHDN branch office
- By post: RPGT Processing Centre, LHDN
Documents to Attach
- Copy of disposal SPA
- Copy of original purchase SPA
- Proof of expenses (legal fee invoices, agent commission receipts, renovation invoices)
- Copy of seller's IC/passport
- Copy of buyer's IC/passport
- Bank statements showing receipt of payment (if applicable)
Payment Timeline — The 60-Day Rule
Everything revolves around 60 days from the date of disposal (the SPA signing date):
| Action | Deadline |
|---|---|
| Seller files CKHT 1A/1B | Within 60 days of SPA date |
| Buyer files CKHT 2A | Within 60 days of SPA date |
| Buyer remits 3% retention to LHDN | Within 60 days of SPA date |
| Seller pays any RPGT balance (if exceeding 3%) | Upon assessment by LHDN |
The 3% Retention Mechanism
The buyer must withhold 3% of the total purchase price and pay it directly to LHDN. This is not 3% of the gain — it is 3% of the full price.
In Mei Ling's example:
- 3% of RM720,000 = RM21,600 (retained by buyer, paid to LHDN)
- RPGT payable = RM16,305
- Refund to Mei Ling = RM21,600 - RM16,305 = RM5,295
LHDN refunds the difference after processing, which typically takes 2-4 months.
If the RPGT exceeds 3% of the purchase price, the seller must pay the shortfall directly. This is uncommon for individual transactions but can occur for short-term disposals with large gains.
Your Lawyer's Role
In practice, your conveyancing lawyer handles most of the RPGT process:
- Calculates the 3% retention
- Holds the retention sum in their client account
- Remits to LHDN on behalf of the buyer
- Assists with CKHT form preparation
Confirm with your lawyer that RPGT filing is included in their scope. Some charge an additional fee for RPGT form preparation. For details on legal costs, see our legal fees guide.
Common Calculation Mistakes
1. Forgetting to include stamp duty in acquisition price. Stamp duty paid on the original purchase is part of your acquisition cost. Including it reduces your chargeable gain.
2. Claiming furniture as renovation. Air conditioners, washing machines, sofas, and curtains are movable items — not deductible. Only permanent improvements to the structure qualify.
3. Using the wrong holding period. The holding period runs from your purchase SPA date to your sale SPA date. Not from key collection. Not from title transfer. SPA to SPA.
4. Not filing when selling at a loss. No RPGT due does not mean no filing required. Both parties must still submit CKHT forms within 60 days. Penalties for non-filing apply regardless of whether tax is owed.
5. Miscounting the year boundary. If you bought on 1 June 2021, "within 3 years" means a disposal SPA dated on or before 31 May 2024. A disposal on 1 June 2024 falls in year 4. Get the exact date right — it can mean the difference between 30% and 20% for citizens.
RPGT Calculator
For quick calculations, use our RPGT calculator guide which walks through the tool and covers edge cases like inherited properties and transfers between related parties.
You can also estimate your total property transaction costs — including RPGT, stamp duty, and legal fees — to understand the full picture before making a buy or sell decision.