Why Malaysia’s house expensive? low RPGT (Real Property Gains Tax)

Updated: January 1, 2018 / Home » Financial Plan » Budget Malaysia

According to Bank Negara, most of Malaysian in Klang valley can never buy a house. With a monthly income about RM 3000, we can only get a RM 175K house loan from banker, and pay our house loan maximum to RM 900 monthly.

Most of the house in Klang Valley included medium cost condominium is more than RM 300 K, so we must earn about RM 5000 monthly  and get a house loan about RM 292 K from the banker.

Do you have RM 5000 monthly? Else you won’t own any house.

Bank Negara House Malaysia

Why Malaysia’s house expensive? low RPGT

Real Property Gains Tax (RPGT) is one of the capital gains tax imposed in Malaysia. RPGT is charged on gains arising from the disposal of real property. RPGT is a move to stop the real estate market speculators.

Our country had RPGT in the tax system many years ago until 31 March 2007, when the government abolished RPGT to attract foreigners to invest in Malaysia,  but resulting in the disparity between the rich and the poor of the country more serious.

Real Property Gain Tax

However, RPGT is re-imposed since 1 January 2010 at the rate of 5% on gains arising from disposals of chargeable assets. And the latest RPGT is revised to the following:

  • Properties held and disposed within 2 years, RPGT = 15%
  • Properties held and disposed after 2 years & up to 5 years , RPGT = 10%
  • Properties held and disposed after 5years, RPGT = 0%
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 RPGT TAX (%)RPGT TAX (%)RPGT TAX (%)RPGT TAX (%)RPGT TAX (%)
27/10/1995 -
31/03/2007
01/04/2007 -
31/12/2009
01/01/2010 -
31/12/2011
01/01/2012Budget 2013
Disposal in 1st year30%0%5%10%15%
Disposal in 2nd year30%0%5%10%15%
Disposal in 3rd year20%0%5%5%10%
Disposal in 4th year15%0%5%5%10%
Disposal in 5th year5%0%5%5%10%
Disposal in 6th year0%0%5%5%0%

The revised RPGT has hardly made the house price lower or stop the market speculators, because most of the construction takes time to complete, normally 2-3 years.

Low RPGT encourage rich people buy properties and sell it out to make fast money, resulting the price of the properties hike.

The government should revise the RPGT and charge a very high rate of profit tax if the owner of the property sell in a short time or is just using back the Real Property Gains Tax Act 1976 (Schedule 5)

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1 comment on “Why Malaysia’s house expensive? low RPGT (Real Property Gains Tax)

  1. Kok Chew Hai [ Reply ]

    apply a home

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