Selling Property in Malaysia: RPGT, Costs and the Process

Selling property in Malaysia triggers two financial obligations most sellers underestimate: Real Property Gains Tax (RPGT) on your profit, and a cluster of transaction costs that can total 3% to 5% of the sale price. Malaysian citizens who hold a property for six or more years pay zero RPGT. Everyone else pays on a sliding scale set by LHDN (Lembaga Hasil Dalam Negeri). This guide explains both in full.

See this topic for the full selling-and-owning hub, and the cost of buying property in Malaysia for the buyer’s side of the same transaction.

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What is RPGT and who must pay it?

RPGT is a capital gains tax on the profit from selling a property or shares in a Real Property Company (RPC) in Malaysia, governed by the Real Property Gains Tax Act 1976.

Who is subject to RPGT:

• Malaysian citizens and permanent residents (PRs)
• Malaysian-incorporated companies and registered bodies
• Non-citizens and foreign-owned entities

The tax is calculated on your chargeable gain, which is roughly your net sale proceeds minus your original purchase price, plus allowable deductions (more on this below).

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RPGT rates in Malaysia (2025-2026)

The rate depends on two things: your category as a disposer, and how long you held the property. The current schedule has been in effect since 1 January 2022 (LHDN).

Individuals who are Malaysian citizens or permanent residents (Part I, Schedule 5)

Holding period	RPGT rate
Year 1, 2, or 3	30%
Year 4	20%
Year 5	15%
Year 6 and beyond	0%

Malaysian companies and registered bodies (Part II, Schedule 5)

Holding period	RPGT rate
Year 1, 2, or 3	30%
Year 4	20%
Year 5	15%
Year 6 and beyond	10%

Non-citizens and non-resident companies (Part III, Schedule 5)

Holding period	RPGT rate
Year 1, 2, 3, 4, or 5	30%
Year 6 and beyond	10%

Malaysian citizens reach a zero rate after five full years. Non-citizens never reach zero, facing a permanent 10% floor.

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How your chargeable gain is calculated

The formula is straightforward:

Chargeable gain = Disposal price - Acquisition price - Allowable expenses

Allowable expenses you can deduct include:

• Legal fees paid at purchase and at sale
• Real estate agent commission on the sale
• Cost of improvements and renovations (with documentation)
• Incidental costs of the disposal (valuation, advertising)

Example: Bought a condo in 2021 for RM500,000; sold in 2026 for RM680,000 with RM25,400 in deductible expenses. Chargeable gain = RM154,600. At the Year 5 rate of 15%, RPGT = RM23,190. Hold one more year and the rate drops to 0%, saving the full amount.

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RPGT exemptions: ways to reduce or eliminate the tax

LHDN provides several exemptions that can substantially cut your liability.

1. The RM10,000 or 10% individual allowance

Every individual disposer (citizens and PRs) automatically receives an exemption equal to RM10,000 or 10% of the chargeable gain, whichever is greater. This relief applies to each disposal and reduces your taxable gain before applying the rate. (LHDN, Schedule 4, Paragraph 2)

2. Once-in-a-lifetime private residence exemption

Malaysian citizens and PRs may elect, once in their lifetime, to exempt the entire gain from disposing of their private residence (a residential building they have occupied as their home). The election is made via Form CKHT 3 through the e-CKHT portal and is irrevocable. Once used, this exemption cannot be claimed again for any future property disposal. (LHDN, Section 8)

3. No-gain-no-loss family transfers

Transfers to or from a spouse, child, parent, grandparent, or grandchild on love-and-affection grounds are treated as occurring at the original acquisition price, so no RPGT arises. Documentation of the family relationship and gift nature is required.

4. Compulsory acquisition

Property acquired compulsorily by the government or a public authority under the Land Acquisition Act 1960 is exempt from RPGT.

5. Other exemptions

Transfers to approved charities and certain government bodies are also exempt. After applying the RM10,000 or 10% individual allowance, many small-gain disposals result in a nil bill.

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The retention sum: how the buyer protects LHDN

From 2025 onward, under the self-assessment regime, the buyer is required to withhold a retention sum from the sale proceeds and remit it directly to LHDN within 60 days of the disposal date. The rates are:

Seller category	Retention sum
Individual citizen or PR	3% of consideration
Malaysian company or registered body	5% of consideration
Non-citizen individual	7% of consideration

This is not the final RPGT amount. It is a prepayment. If your actual RPGT liability is lower (or nil), you claim a refund from LHDN after filing.

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Filing: e-CKHT and the self-assessment regime (2025 onwards)

From 1 January 2025, Malaysia moved RPGT to a mandatory self-assessment system (LHDN). Key points:

• All CKHT forms must be submitted electronically via the e-CKHT portal on MyTax (mytax.hasil.gov.my). Paper forms are no longer accepted and are treated as a failure to file.
• The seller submits Form CKHT 1A (for individuals) or the relevant form for their category, plus Form CKHT 3 if claiming the private residence exemption.
• The buyer submits Form CKHT 2A to confirm the transaction and remit the retention sum.
• Both forms must be submitted within 60 days of the date of the Sale and Purchase Agreement (SPA).
• Sellers without a Tax Identification Number must register via e-Daftar on MyTax before filing.
• Late filing can trigger a 10% late-payment surcharge and additional penalties.

If you have never filed tax before, register on MyTax (e-Daftar) well ahead of your sale date.

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The property selling process: step by step

Selling a property in Malaysia typically takes three to six months from listing to completion of the title transfer.

Step 1: Engage a registered real estate agent

Appoint an agent registered with BOVAEP. The regulated maximum commission is 3% of the sale price, with 8% SST on top (effective cost: 3.24%). Commission is paid by the seller on completion.

Step 2: Sign the Letter of Offer

Once a buyer agrees on price, both parties sign a Letter of Offer. The buyer pays a 2% earnest deposit at this stage.

Step 3: Instruct your solicitor and sign the SPA

Your conveyancing lawyer drafts the Sale and Purchase Agreement. It is typically signed within 14 days of the Letter of Offer. The buyer pays a further 8% deposit (10% total).

Step 4: File e-CKHT forms within 60 days

Both seller and buyer must submit their CKHT forms electronically via MyTax within 60 days of the SPA date. The buyer remits the retention sum to LHDN at this point.

Step 5: Loan redemption (if applicable)

Your solicitor obtains a redemption statement from your bank and discharges the charge once the buyer’s loan is released. Banks charge a small administrative fee.

Step 6: Settlement and title transfer

The balance 90% of the purchase price is paid on completion, typically 90 days after SPA signing. Your solicitor then registers the Memorandum of Transfer at the Land Office.

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All the costs a seller pays

Here is a summary of what you will typically pay as a seller:

Cost item	Typical amount
Real estate agent commission	Up to 3% of sale price (plus 8% SST)
Seller’s legal/conveyancing fees	~RM2,000 to RM5,000+ depending on complexity
RPGT	0% to 30% of chargeable gain (see rate table above)
Bank loan redemption admin fee	RM200 to RM500+ (varies by bank)
SPA stamp duty (on the agreement itself)	RM10 (fixed)
Miscellaneous disbursements	RM500 to RM1,500 (land searches, couriers, etc.)

Note: stamp duty on the Memorandum of Transfer (MOT) and the buyer’s loan agreement are costs borne by the buyer, not the seller.

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Key takeaways

• Malaysian citizens and PRs pay zero RPGT after holding a property for six or more years (five full years of ownership). Timing your sale around this threshold can save tens of thousands of ringgit.
• Every individual seller gets an automatic deduction of RM10,000 or 10% of the gain, whichever is greater, before RPGT is calculated.
• The once-in-a-lifetime private residence exemption eliminates RPGT entirely on your home, but can only be used once. Use it wisely.
• From 1 January 2025, RPGT filing is mandatory online via MyTax e-CKHT. Both seller and buyer must submit within 60 days of the SPA date.
• The buyer withholds a 3% to 7% retention sum and pays it to LHDN on your behalf. You claim any overpayment as a refund after filing.
• Agent commission is capped at 3% (plus SST) by BOVAEP regulations.
• Budget three to six months from listing to completion for a typical residential sale.

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Frequently asked questions

Q: If I sell my property after more than five years, do I still need to file RPGT forms? Yes. Even if your tax liability is zero (because you are a citizen holding for six or more years), you must still submit the CKHT forms via e-CKHT within 60 days of the SPA date. Failure to file is a separate offence from failure to pay.

Q: Can I use the once-in-a-lifetime exemption on an investment property? No. The private residence exemption under Section 8 of the RPGT Act applies only to a property you have genuinely occupied as your home. An investment property or rental unit does not qualify. You must elect the exemption in writing via Form CKHT 3 at the time of disposal.

Q: Who pays the real estate agent commission when selling property in Malaysia? The seller pays the agent commission, capped at 3% of the agreed sale price, plus 8% SST, under BOVAEP rules. The commission is typically due once the sale completes, not at listing.

Q: What happens if I sell a property I inherited? Inheritance through a will is not subject to RPGT at the point of transfer. When you later sell, RPGT is calculated from the market value at the date you acquired the asset (typically the deceased’s date of death). Consult a tax professional for estates with multiple beneficiaries.

Q: Can renovation costs reduce my RPGT bill? Yes. Documented capital expenditure on improvements (renovations, extensions, major fittings) can be added to your acquisition cost, reducing your chargeable gain. Keep all receipts. Routine maintenance such as painting or minor repairs does not qualify.