| |
Real Property Gains Tax (RPGT)
Based on the Real Property
Gain Tax Act 1976, RPGT is a tax on chargeable gains derived from
disposal of property. A chargeable gain is the profit when the
disposal price is more than purchase price of the property.
As part of the effort in reducing the speculative activities in
the property market, it was proposed under Budget 2014 that the real
property gains tax (RPGT) to be revised. The following is the RPGT
rates effective from 1st January 2014.
|
|
REAL PROPERTY GAINS TAX FOR 2014 |
Personal (citizen &
PR) |
Company |
|
|
Disposed within 3 years |
30% |
30% |
| |
Disposed in 4th
year |
20% |
20% |
| |
Disposed in 5th year |
15% |
15% |
| |
Disposed after 5
years |
0% |
5% |
For non-citizen,
disposal within 5 years is subject to a flat RPGT of 30%. Disposal
after 5 years, RPGT is at 5%.
The RPGT rates increase is applicable to disposal of property taking
place on or after 1 January 2014.
RPGT is imposed on the
net gains from disposal of property after deducting the following
costs:-
1. Acquisition price
2. Stamp duty
3. Legal fees
4. Renovation costs
5. Commission for sales and administrative payments
There are exemptions
allowed for RPGT. Among the exemptions are:-
1. Exemption on gains from the disposal of one residential property
once in a lifetime to individual (citizen & PR only).
2. Exemption on gains arising from the disposal of real property
between family members (e.g. husband and wife, parents and children
and grandparents and grandchildren).
3) 10% of profits or RM10,000 per transaction (whichever is higher) is
not taxable.
Example To
Illustrate Calculation Of RPGT
|
|
|
Disposal Price on 2 Jan
2014 |
|
300,000
|
|
|
Less:
Renovation/extension costs |
20,000
|
|
|
|
Legal fees |
3,000
|
23,000
|
277,000
|
|
Acquisition
Price on 3 Jan 2012 |
|
200,000
|
|
|
Add:
Duty stamp paid |
3,000
|
|
|
|
Legal fees |
2,500
|
5,500
|
205,500
|
|
Profit |
|
|
71,500
|
|
Less:
Exemption of RM10,000 or 10% of the chargeable gain, whichever
is greater |
|
|
7,150
(-10,000)
|
|
Chargeable
gain |
|
|
61,500
|
Rate of RPGT 30% applied for disposal in 1st 3 years after the
date of acquisition. (Property disposed after 2 years)
RPGT on RM61,500 @ 30%
= RM18,450 |
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