RPGT: Individual and Private Residence Exemption (Schedule 4 / s.8 / Schedule 5 of the ACP 1976)

Introduction

Real Property Gains Tax (RPGT) is imposed on gains from the disposal of real property under the Real Property Gains Tax Act 1976 (ACP 1976). For individuals, the general exemption under paragraph 2 of Schedule 4 of the ACP 1976 reduces the tax burden. This article explains the individual general exemption, the applicable rates, and the private residence exemption.

Individual general exemption: RM10,000 or 10%

Through paragraph 2 of Schedule 4 of the ACP 1976, the exemption is available to individuals only: for disposals of an individual's entire share of ownership, chargeable gains are exempt up to RM10,000 or 10% of the chargeable gains, whichever is greater.

With effect from 31.12.2015, this exemption also applies to disposals of part of a share of ownership (see the official HASiL page).

RPGT rates: Schedule 5 of the ACP 1976

Rates are categorised by the category of disposer and the holding period. For disposals in the sixth year after the date of acquisition, with effect from 1.1.2022 the rate is 0% for Category Part I (Malaysian citizen individuals / partnerships). Before that, a 5% rate applied to disposals from 1.1.2019–31.12.2021.

Private residence exemption (s.8 of the ACP 1976)

An exemption is given on gains derived from the disposal of a private residence, and may only be enjoyed by an individual once in a lifetime:

• Only Malaysian citizen individuals or Malaysian permanent residents are eligible;
• The exemption is given for one private residence only;
• A private residence is defined as a building or part of a building in Malaysia owned by an individual and occupied or certified fit for occupation as a place of residence;
• The election for the exemption must be made through Form CKHT 3 electronically via e-CKHT and cannot be withdrawn;
• The exemption is not given if it has already been granted to the individual under the Land Speculation Act 1974 in respect of the disposal of a private residence.

Forms and periods

• CKHT 1A/1B — must be submitted within 60 days of the date of disposal.