RPGT for Inherited Property in Malaysia: Do You Pay Tax If You Sell?

Yes, Real Property Gains Tax (RPGT) can apply when you sell an inherited property in Malaysia. However, the deemed acquisition date rule and a no-gain transfer provision on inheritance often reduce or eliminate the tax burden entirely.

What Is RPGT and Why Does It Apply to Inherited Property?

RPGT is levied on the chargeable gain from disposing of real property, administered by LHDN under the Real Property Gains Tax Act 1976 (RPGTA 1976). Inheriting a property does not trigger RPGT. The tax only arises when you sell. Your taxable gain is the difference between the disposal price and your acquisition price, adjusted for allowable costs.

The Deemed Acquisition Date: The Most Important Rule

When you inherit a property, you do not use the original purchase date of the deceased as your acquisition date. Under the RPGTA 1976, the rules differ depending on whether you are acting as an executor or a beneficiary.

For the Executor of the Estate

The executor (or administrator) steps into the shoes of the deceased. LHDN deems the executor’s acquisition date to be the date of death of the deceased. The acquisition price is the market value of the property at the date of death.

Crucially, the disposal price is deemed equal to the acquisition price under Paragraph 3(1)(a) of Schedule 2 of the RPGTA. No chargeable gain arises at the estate level on the devolution itself.

For the Beneficiary or Legatee

Once the property is formally transferred to you as a beneficiary under a will or under the Distribution Act 1958 (for intestate estates), your holding period starts fresh from the date of the transfer into your name, not the date of death. This is the date that determines which RPGT rate bracket applies when you eventually sell.

This distinction matters enormously. A two-year gap between the date of death and the completion of the grant of probate or letters of administration means two years of your holding period have already elapsed before you even receive the property.

RPGT Rate Brackets in 2025

Once you sell, your tax rate depends on how long you have held the property since your deemed acquisition date. The rates for Malaysian citizens and permanent residents (as updated and in force from 1 January 2022 onwards) are:

Holding Period (from acquisition date)	Malaysian Citizens and PRs	Non-Citizens and Companies
Year 1 (within 1 year)	30%	30%
Year 2	20%	30%
Year 3	15%	30%
Year 4	15%	30%
Year 5	5%	30%
Year 6 and beyond	0%	10%

Source: LHDN RPGT Rates, 2025.

The 0% rate after year 6 is the most important figure for most beneficiaries. If the property has been in the deceased’s estate or formally vested in your name for more than six years before you sell, no RPGT is payable.

Worked Example: How the Numbers Look

Scenario: Your parent passed away in January 2018. The property was valued at RM400,000 at the date of death. Probate was granted and the property was formally transferred to you (as sole beneficiary) in December 2020. You sell in March 2026 for RM620,000.

• Deemed acquisition date: December 2020
• Holding period at disposal: approximately 5 years and 3 months (year 6)
• RPGT rate: 0% (year 6 and beyond for Malaysian citizen)
• RPGT payable: RM0

Had you sold in July 2025 (year 5), the 5% rate would apply to a chargeable gain of RM220,000, producing a tax bill of RM11,000 before further deductions. Timing your sale into year 6 saves real money.

Allowable Deductions That Reduce Your Chargeable Gain

You are not taxed on the full difference between selling price and acquisition price. Allowable deductions under the RPGTA include legal fees and stamp duty on the acquisition transfer, legal fees on disposal, estate agent commission (capped at 3%), enhancement and renovation costs supported by invoices, and incidental expenses such as valuation fees. Routine maintenance, painting, or minor repairs do not qualify.

Key Exemptions That May Apply

Beyond the 0% rate at year 6, LHDN provides additional exemptions that can benefit beneficiaries.

One-Time Private Residence Exemption

A Malaysian citizen may claim a once-in-a-lifetime full exemption on gains from the disposal of a private residence. “Private residence” means a building or part of a building used solely as a dwelling, including land not exceeding 0.5 hectares attached to the building. You must not have claimed this exemption before. This is a lifelong exemption, so use it on your most valuable disposal.

Gifts Between Husband and Wife, or Parent and Child (No-Gain Transfer)

If a beneficiary transfers the inherited property by way of a gift to their spouse or child, that transfer is also treated as a no-gain disposal under Schedule 2, meaning no RPGT arises on that transfer. However, the recipient’s holding period restarts from the date of that gift.

Exemption for Low-Value Gains

An exemption of 10% of the chargeable gain or RM10,000, whichever is greater, is available to individual disposers for each disposal. Source: LHDN Exemptions page.

The 2025 Self-Assessment Shift: What Changed for Sellers

From 1 January 2025, RPGT moved to a Self-Assessment Tax System (STS CKHT). You are now responsible for calculating your own chargeable gain, submitting Form CKHT 1A online via the MyTax e-CKHT portal, and paying any tax due within 90 days of the disposal date.

Failure to file, even when no tax is owed (for example, when your holding period exceeds 6 years), can attract penalties. File Form CKHT 1A regardless and declare a nil gain where applicable. Your solicitor typically assists, but the legal obligation rests with you.

Executor vs. Beneficiary: Summary of Key Differences

Question	Executor	Beneficiary
Deemed acquisition date	Date of death of deceased	Date of formal transfer into beneficiary’s name
Acquisition price	Market value at date of death	Market value at date of transfer
RPGT on devolution itself	No (deemed equal disposal and acquisition price)	No (same deemed rule applies)
Holding period clock starts	Date of death	Date of formal transfer
Subject to 0% at year 6?	Yes	Yes

Practical Steps Before You Sell

1. Obtain a formal valuation at the date of death (if not done during probate): this is your acquisition price.
2. Confirm your acquisition date with your solicitor: is the transfer registered with the Land Office?
3. Count your holding period from that date. If you are in year 5, waiting a few months to year 6 means 0% RPGT.
4. Compile allowable deductions with invoices and receipts.
5. File Form CKHT 1A via MyTax within 90 days of the disposal.

For a full overview of all costs when buying or selling property in Malaysia, see our guide on property transaction costs in Malaysia. If you are navigating stamp duty on the transfer itself, our article on stamp duty for property transfers in Malaysia walks through the rates and exemptions.

Key Takeaways

• Inheriting a property does not trigger RPGT. Tax only arises when you sell.
• The executor’s deemed acquisition date is the date of death. The beneficiary’s deemed acquisition date is the date the property is formally transferred into their name.
• The no-gain deemed transfer rule means no RPGT arises on the estate-to-beneficiary transfer itself.
• RPGT rates for Malaysian citizens range from 30% (within year 1) down to 0% (year 6 and beyond), calculated from the beneficiary’s acquisition date.
• Allowable deductions, the one-time private residence exemption, and the RM10,000 or 10% individual exemption can further reduce your liability.
• From January 2025, RPGT operates on a self-assessment basis: you must file and pay within 90 days of disposal via MyTax, even if no tax is due.

Frequently Asked Questions

Q: Does the holding period for RPGT run from when my parent first bought the property?

No. For a beneficiary, the holding period begins from the date the property is formally transferred into your name following the grant of probate or letters of administration. You cannot inherit the deceased’s original holding period.

Q: My mother died in 2015 and the property is still in the estate name. What rate applies if I sell now as executor?

The executor’s acquisition date is the date of death (2015). By 2026, the holding period exceeds 6 years, so the rate for a Malaysian citizen executor is 0%. Confirm with a tax professional if there were any intervening transactions.

Q: Can I use the one-time private residence exemption on inherited property?

Yes, provided the property qualifies as a private residence (used solely as a dwelling), you are a Malaysian citizen, and you have not previously claimed this exemption on another disposal.

Q: Do I still need to file RPGT forms if my gain is zero or I qualify for 0% tax?

Yes. From January 2025, filing Form CKHT 1A via MyTax is mandatory for all disposals, including those where the chargeable gain is nil or the rate is 0%. The form serves as a self-assessment notice under Section 13 of the RPGTA.

Q: What happens if the property is jointly inherited by several siblings?

Each beneficiary is assessed separately on their proportional share of the gain and may each claim applicable exemptions independently. Clear documentation from the estate administration is essential for correct cost apportionment.