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Budget 2013 RPGT Increased 5 percent

In Budget 2013 Malaysia, our Prime Minister, Dato’ Sri Mohd Najib bin Tun Abdul Razak has once again introduce a new structure of Real Property Gains Tax (RPGT) as following, effective 1 January 2013:

  • First Year = 15%
  • Second Year = 15%
  • Third Year = 10%
  • Fourth Year = 10%
  • Fifth Year = 10%
  • Above Fifth Year = 0%

Compare to Budget 2012, the RPGT tax was implemented as following:

  • First Year = 10%
  • Second Year = 10%
  • Third Year = 5%
  • Fourth Year = 5%
  • Fifth Year = 5%
  • Above Fifth Year = 0%

Generally, the additional 5% of RPGT is believed to have a very minimal impact to curb skyrocketing house prices issue.

Bear in mind, the completion time frame for strata titled building e.g. apartment, condo, townhouse is normally taking about 36 months and 24 months for landed property, which means under the new tax rate, 15% for first two years is basically not applicable for new launch property.

So can we conclude that, genuine home buyers for own stay are disappointed with the announcement; property investors are OK with it; whereas speculative activities will still go on?

6 thoughts on “Budget 2013 RPGT Increased 5 percent”

  1. SM
     ·  Reply

    Hi..not really understand your para below:
    =================
    Bear in mind, the completion time frame for strata titled building e.g. apartment, condo, townhouse is normally taking about 36 months and 24 months for landed property, which means under the new tax rate, 15% for first two years is basically not applicable for new launch property.
    ================
    this means if we sell our properties before the title completely transfered then there;s no tax?

    • Horlic Lim
       ·  Reply

      Based on the revised RGPT under Budget 2013, if you sell your property within first two years, 15% of rpgt shall be charged or 10% for disposal in 3rd/4th/5th year. Thereafter 0%.

      Assume you buy an new launch apartment from developer on 1 February 2013 (assume this is the date that Sales and Purchase Agreement (SPA) is executed, too), it normally takes about 36 months* to complete the project, say by 31 January 2016, else LAD will be imposed.

      *as according to SPA (schedule H), developer shall handover the unit to you within 36 months.

      By the time you get your key for the apartment, the 15% is no longer applicable for the property.

      RPGT is nothing to do with your property title.

  2. Suresh
     ·  Reply

    They will increase again at next budget. Then what

  3. Sabrina
     ·  Reply

    Thks, very useful info.

  4. yeam
     ·  Reply

    hey, hope you can help. My scenario is as below:

    I bought a house at 2011 and I sold this property (signed S&P Jan 2013). Will the new RPGT apply to my case? If no, then is it only 5% of my profit?

    thanks in advance.

  5. Alan
     ·  Reply

    Hi I love Malaysia and am looking at buying however I heard on radio that RGPT for expats is 30% of the whole of the sale price if sold before 5 years and 25% after the 5 years . is this correct??

    If so I will reconsider buying in this wonderful country. why lose 1/4 of the value of your investment ?

    I would clarification on this please.

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