RPGT – The Relief of Residential Sellers

RPGT Exemption Order – The Relief of Residential Sellers

The PENJANA 2020 announced in June 2020 contained one very significant measure: the (Real Property Gains Tax) RPGT exemption. In essence, a Malaysia citizen is entitled for this RPGT exemption in respect of gains on the disposal of up to three (3) Residential Properties from 1st June, 2020 up to 31st December, 2021.

The RPGT exemption is granted if the following conditions are fulfilled:-

1. The property owners must be an individual who is a Malaysian citizen and is the sole or joint owner of the property to be disposed;
2. The property disposed must be a ‘Residential Property i.e. a house, a condominium unit, an apartment or flat in Malaysia, a service apartment and a small office home office (SOHO) which used as dwelling houses. This means that vacant lands (all types), agricultural lands, industrial properties and commercial properties do not qualify
3. The residential property which is to be disposed of is NOT acquired by the following ways:-
   1. transfer between spouses; or
   2. gift between spouses, parent and child, or grandparent and grandchild where the donor is a citizen.
4. The Sale and Purchase Agreement (“SPA”) for the disposal of the residential property is executed on or after 1st June, 2021 but not later than 31st December, 2021 and is duly stamped not later than 31st January, 2022. In the event that there is no SPA construed, the instrument of transfer for the disposal of the residential property is executed on or after 1st June, 2021 but not later than 31st December, 2021, and is duly stamped not later than 31st January, 2022.

RPGT exemption encourages property owners to sell their properties, especially for owners who benefitted from the substantial price appreciation. The moratorium and targeted incentives to the affected households have played a significant role to alleviate the negative impacts of the unprecedented Covid-19 outbreak worldwide.

Click here to refer to the RPGT Exemption Order 

This article is written by

Liew Chen Siang
Partners, Low & Partners

Anastasia Lim Yee Zing
Senior Associate, Low & Partners