The 2012 Budget unveiled on 7 October 2011 included a revision of the Real Property Gains Tax (RPGT) rate from the 5% to 10% as part of the Government’s efforts to curb property speculation. The increase was recently gazetted and took effect from 1 January 2012 onwards. Jennifer Chang studies the impact of this move on property purchasers.
The rate of 10% applies to gains on properties held and disposed within two years while gains on properties held and disposed between two and five years will be levied a 5% RPGT rate and disposals after five years continue to be exempted from RPGT.
RPGT is a form of capital gains tax that is chargeable on gains arising from the disposal of real property, which is defined as:
• Any land situated in Malaysia and any interest, option or other right in or over such land; or
• Shares in a real property company. Anyone disposing of real property in Malaysia - whether a resident or non-resident - will be charged RPGT on the gains.
