How is property tax determined for foreigner buying property in Malaysia? Surprisingly, both foreigner and local will be imposed the same property tax rate effective from 1 Jan 2010 as according to the announcement of latest Budget 2010 Malaysia by government.
Real Property Gains Tax (RPGT) at a fixed rate of 5% will be imposed on the gains from the disposal of real property for all categories of owners. What is Real Property Gains Tax?
Real Property Gains Tax Act 1976 (Schedule 5)
RPGT is a tax levied by the Inland Revenue Board (IRB) on chargeable gains derived from the disposal of real property. This tax is provided for in the Real Property Gains Tax Act 1976. The tax is levied on the gains made from the difference between the disposal price and acquisition price. Source: Valuation and Property Services Department, Ministry of Finance Malaysia
RPGT Exemption – Effective from 1 April 2007
With effect from 1 April 2007, RPGT would not be imposed on gains made from the disposal of real property. The Real Property Gains Tax Exemption Order was gazette as P.U. (A) 146 on 1 April 2007, which excludes the application of all the rules of the Real Property Gains Tax Act. Source: Jabatan Penilaian Dan Perkhidmatan Harta Malaysia
RPGT 5% Flat Rate – Effective from 1 Jan 2010
In the Budget 2010 presentation, the Government proposed that real property gains tax at a fixed rate of 5% be imposed on the gains from the disposal of real property effective Jan 1, 2010. The Real Property Gains Tax (Exemption) Order 2009 will be gazette as soon as possible and is effective Jan 1, 2010. Source: Datuk Seri Ahmad Husni Hanazdlah, Second Finance Minister of Malaysia
