RPGT for Companies vs Individuals in Malaysia: Is the Rate Higher?

Yes, companies permanently pay more RPGT than Malaysian individuals. Once an individual citizen holds a property beyond five years, the tax rate drops to zero. A company incorporated in Malaysia can never reach zero. The minimum rate for any company disposal is 10%, no matter how long the asset has been held.

Understanding exactly why this matters, and what you can do about it, is the focus of this guide.

What is RPGT and who does it apply to?

Real Property Gains Tax (RPGT) is a capital gains tax levied on the profit made when a chargeable asset is disposed of in Malaysia. Chargeable assets include land, buildings, and shares in Real Property Companies (RPCs). The tax is administered by Lembaga Hasil Dalam Negeri (LHDN) under the Real Property Gains Tax Act 1976.

RPGT applies to both individuals and companies. The rate you pay depends on two things: who you are (your disposer category) and how long you held the asset before selling.

From 1 January 2025, Malaysia moved to a Self-Assessment System (STS) for RPGT, meaning sellers are responsible for calculating their own chargeable gain, filing the RPGT Return Form, and making payment within 60 days of disposal. (Source: LHDN, January 2025 guidelines update.)

The three disposer categories under Schedule 5

RPGT rates are set by Schedule 5 of the RPGT Act, which divides sellers into three parts.

Part I covers Malaysian citizens and permanent residents (individuals and partnerships made up of citizens/PRs).

Part II covers companies incorporated in Malaysia, including Sdn Bhd companies regardless of the nationality of their shareholders.

Part III covers non-citizens (foreign individuals) and companies not incorporated in Malaysia.

The distinction between Part I and Part II is the core of this article.

The full rate schedule: companies vs individuals

The rates below have been in effect since 1 January 2022 and remain current for the 2025 and 2026 assessment years (Source: LHDN, hasil.gov.my).

Disposal Year (from acquisition)	Part I: Citizen / PR Individual	Part II: Malaysian Company	Part III: Non-Citizen / Foreign Company
Year 1	30%	30%	30%
Year 2	30%	30%	30%
Year 3	30%	30%	30%
Year 4	20%	20%	30%
Year 5	15%	15%	30%
Year 6 onwards	0%	10%	10%

The numbers are identical for years one to five. The fork happens at year six. Malaysian citizens and PRs pay nothing on gains after five full years. Malaysian companies pay a flat 10% forever.

Foreign individuals and foreign-incorporated companies follow Part III: a flat 30% for the first five years, then 10% from year six onward. Note that a foreign-owned Sdn Bhd incorporated in Malaysia is still Part II (10% floor), which is one reason some foreign investors prefer incorporating locally.

Why companies never reach zero

The 0% exemption introduced under Budget 2022 was deliberately targeted at individual citizens and PRs. The policy rationale was to reduce speculation in the residential property market by long-term individual owner-occupiers and small investors. Companies, which can theoretically hold property indefinitely and are not personal homeowners, were excluded from that relief.

This design means the 10% floor is a permanent structural feature of the Act for corporate disposers, not a transitional rule. It has not changed through Budget 2023, Budget 2024, or Budget 2025.

What counts as the holding period?

The holding period is calculated from the date of acquisition to the date of disposal as defined in law, not from when payment was made or keys were exchanged. For properties purchased through a Sale and Purchase Agreement (SPA), the acquisition date is typically the date the SPA was executed.

For companies, the disposal date is equally important for the self-assessment filing deadline. Under the 2025 STS rules, the RPGT Return Form (CKHT 1A) must be submitted and tax paid within 60 days of the date of disposal.

Getting the holding period wrong by even one day can shift the applicable rate by a full bracket (for example, from 15% to 20% if you dispose in year four rather than year five).

The RM10,000 or 10% private residence exemption

Individual citizens and PRs are entitled to a once-in-a-lifetime exemption on the gain from disposing of one private residence. The exemption is the higher of RM10,000 or 10% of the chargeable gain. This exemption is available only to natural persons. Companies cannot claim it.

This is a second layer of advantage for individual disposers beyond the 0% rate.

Individual annual exemption

Each individual (Part I) also has an annual RPGT exemption of RM10,000 on net chargeable gains across all disposals in a year. Again, this applies only to individuals, not to companies.

Key differences summarised

Beyond the rate table, here is the practical gap between individual and corporate disposers:

• Zero-rate threshold: Individual citizens reach 0% at year six. Companies never reach 0%.
• Private residence exemption: Available to individuals only.
• Annual RM10,000 exemption: Available to individuals only.
• Part III rates: A foreign individual (Part III) and a foreign-incorporated company (Part III) pay identical rates. However, a foreign-owned Sdn Bhd incorporated in Malaysia is assessed under Part II, which is more favorable from year six onward (10% vs 30% for years 1-5 is the same, but Part II kicks in for the lower holding-period rates in years 4 and 5).

Holding tactics for companies

Because companies cannot escape the 10% floor, the focus for corporate property planning is on reducing the chargeable gain rather than eliminating the tax rate itself.

1. Maximise allowable deductions. RPGT is charged on the net chargeable gain, which is disposal price minus acquisition price minus allowable expenses. Allowable expenses include legal fees, real estate agent commissions, stamp duty on purchase, and enhancement expenditure (capital improvements, not repairs). Every ringgit of documented allowable expenditure directly reduces the taxable base.

2. Hold beyond year five before disposal. Even though 10% remains, there is no advantage to disposing in year six versus year twelve for a company. The rate is flat. The strategy is simply to avoid the 30% or 20% early-disposal rates by waiting past the year-five mark before triggering a disposal.

3. Consider installment disposal timing. If a corporate property disposal generates a large gain, structuring the disposal to span more than one assessment year does not split the RPGT liability (RPGT is assessed on the disposal date), but it can align cash flow planning for the resulting tax payment.

4. Assess whether the holding structure makes sense from the outset. For residential property held purely as a personal investment, holding in an individual’s name rather than a company name means the 0% path is available after year five. Moving property between personal and corporate ownership typically triggers a disposal event and its own RPGT implications, so the decision is best made at acquisition.

5. Keep acquisition cost evidence. Under the STS system effective from 2025, LHDN no longer issues assessments proactively. The burden of proving the original acquisition price and all allowable expenses falls entirely on the disposer. Companies should maintain property acquisition files permanently.

What about Real Property Company (RPC) shares?

A Real Property Company is a company whose real property assets (or shares in other RPCs) make up at least 75% of total tangible assets. Disposing of shares in an RPC is treated as a disposal of real property for RPGT purposes. This means RPGT applies to the gain on those shares at the same rate as a direct property disposal, using the same Schedule 5 framework. Companies holding shares in RPCs face the same 10% floor.

For more on related property selling costs, see our guide on property transaction costs in Malaysia.

Key takeaways

• Malaysian companies (Part II, Schedule 5) pay RPGT at the same rates as individuals for years one to five: 30%, 30%, 30%, 20%, 15%.
• The critical difference is at year six and beyond: individuals (citizens/PRs) pay 0%, while companies pay a flat 10%, permanently.
• Foreign-owned Sdn Bhd companies incorporated in Malaysia are still Part II and benefit from this structure over foreign-incorporated entities.
• Individuals have two additional reliefs unavailable to companies: the once-in-a-lifetime private residence exemption and the annual RM10,000 exemption.
• Under the 2025 Self-Assessment System, all disposers, including companies, must calculate and submit RPGT returns within 60 days of disposal.
• For corporate property owners, tax minimisation focuses on maximising allowable deductions and avoiding early-year (high-rate) disposals, since the rate floor cannot be reduced to zero.

Frequently asked questions

Does a foreign-owned Sdn Bhd pay the same RPGT as a Malaysian-owned Sdn Bhd?

Yes. A company incorporated in Malaysia falls under Part II of Schedule 5 regardless of the nationality or residency of its shareholders. Both pay 30% in years one to three, stepping down to 20% in year four, 15% in year five, and a flat 10% from year six onward.

Can a company claim the 0% RPGT rate after five years by registering individual directors as the owners?

No. The 0% rate applies to the legal owner at the point of disposal. If the property is legally owned by a company, the company is the disposer and Part II rates apply. The identity of directors or shareholders does not change this. Transferring ownership from a company to an individual before disposal would itself be a chargeable disposal, triggering RPGT on any gain at that point.

What is the RPGT rate if a company sells a property it bought in year one and sells in the same year?

30% of the chargeable gain. Year one disposals for all three disposer categories attract the maximum 30% rate.

Is there any way for a company to completely avoid RPGT on a property disposal in Malaysia?

LHDN provides exemptions from RPGT in certain specific circumstances: transfers between spouses, transfers to children (individuals only), certain transfers between companies within the same group, and transfers to charitable bodies. Group relief requires compliance with specific conditions under the RPGT Act and should be reviewed with a licensed tax agent. Outside these statutory exemptions, there is no mechanism for a Malaysian company to reach a 0% RPGT rate on a straightforward disposal.

Where can I find the official RPGT rate table?

The official rate schedule is published on the LHDN website at hasil.gov.my/en/rpgt/real-property-gains-tax-rpgt-rates/. The RPGT Guidelines (updated January 2025) are also available at the LHDN RPGT microsite and contain detailed operational rules on allowable deductions, filing procedures, and exemptions.

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This article is for general educational purposes only. Tax treatment depends on individual circumstances. Consult a licensed tax agent or legal adviser before making property disposal decisions.