s Real Property Gains Tax (RPGT) in Malaysia in the rising trend? It seems to be happening. As we can see from the data on below, the RPGT rate has been increased progressively by government from 0% to 5%, 10% and 15%, in year 2010, 2012 and 2013, respectively.
Malaysia RPGT historical rates from 1976 to 2013:-
| Disposal in 1st year | Disposal in 2nd year | Disposal in 3rd year | Disposal in 4th year | Disposal in 5th year | Disposal in 6th year & above | |
|---|---|---|---|---|---|---|
| 1 Jan 1976 - 31 May 2003 | 30% | 30% | 20% | 15% | 5% | 0% |
| 1 Jun 2003 - 31 May 2004 | 0% | 0% | 0% | 0% | 0% | 0% |
| 1 Jun 2004 - 31 Mar 2007 | 30% | 30% | 20% | 15% | 5% | 0% |
| 1 Apr 2007 - 31 Dec 2009 | 0% | 0% | 0% | 0% | 0% | 0% |
| 1 Jan 2010 - 31 Dec 2011 | 5% | 5% | 5% | 5% | 5% | 0% |
| 1 Jan 2012 - 31 Dec 2012 | 10% | 10% | 5% | 5% | 5% | 0% |
| effective 1 Jan 2013 (Budget 2013) | 15% | 15% | 10% | 10% | 10% | 0% |
Property flipper or short-term investor must be cautious on the rising RPGT. You may want to take the original rate as per Real Property Gain Tax Act 1976 into your consideration, meaning 30% tax will be imposed on chargeable property gain for disposal within first two years.
Always be prepared for the worst case. At least, you get the realized ROI as close as your forecast ROI in the worst scenario.
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