Capital gains are generally not subject to tax in Malaysia. Real Property Gains Tax is charged on gains arising from the disposal of real property situated in Malaysia or of interest, options or other rights in or over such land as well as the disposal of shares in real property companies. The rates of tax are as follows:
|Disposal within 2 years||30%|
|Disposal in the 3rd year||20%|
|Disposal in the 4th year||15%|
|Disposal in the 5th year||5%|
|Disposal in the 6th year and thereafter|
For individuals who are citizens or permanent residents, gains from disposal of real properties after five years are not subject to this tax. They are also entitled to an exemption of RM5,000 or 10% of the gains, whichever is the greater. In addition, they also enjoy a one-time tax exemption on the gains arising from the disposal of one private residence.
For non-citizens and non-permanent resident individuals, gains from the disposal of real property within 5 years are subject to tax at a flat rate of 30%. However, disposal in the sixth year and thereafter will be taxed at 5%.
Back to the top