Guide to taxes

Malaysia has a relatively low income tax and a few other taxes.

The Real Property Gains Tax (RPGT) is an unavoidable tax when you are considering selling your property. RPGT is a form of Capital Gains Tax that is imposed on the disposal of a property. Capital Gains Tax is a tax on the profit you make when you sell something that's increased its value.

It is important to know how much the RPGT will be because it could be the deciding factor on whether you should sell now or later.

Any individual who sells a property in Malaysia is required to pay RPGT. The current prescribed tax rate is as follows. (See table)

RPGT as of Y2014

Holding Period Citizen/PR Non-citizen/PR Company
1-3 Years 30% 30% 30%
4 Years 20% 30% 20%
5 Years 15% 30% 15%
Above 5 Years 0% 5% 5%

The net rental (and other) income of non-residents is taxed at a flat rate of 26%, without any personal relief. For the Malaysian citizen and permanent resident individuals, any property disposed within the first five (5) years of purchase is subjected to RPGT. Beyond that, there is no RPGT imposed. For non-residents, real property gains tax (RPGT) is levied on the disposal of properties held for more than five years at a flat rate of 5%. As of 2014, RPGT rates apply differently for citizens, non-citizens, and companies.