Exemption on Real Property Gain Tax (RPGT) on disposal of property during 2021

01Overview

Based on the PENJANA 2020, Malaysian citizens are exempted from Real Property Gain Tax (RPGT) for the disposal of residential property from 01.06.2020 to 31.12.2021.

This exemption has been gazetted under the Real Property Gain Tax (Exemption) 2020 [P.U.(A) 218], on 28.07.2020.

02Key takeaway

You will understand:

• What is the exemption?
• Who is qualified for the exemption?
• What is the residential property?
• What are the conditions to be fulfilled?
• Do I need to file RPGT form?

03Summary of learning

What is the exemption?

Malaysian citizens are exempted from paying the 5% (or higher) RPGT for the disposal of residential property from 1 June 2020 to 31 December 2021.

Who qualified for the exemption?

This exemption only applicable to individual who is a citizen of Malaysia.

What is residential property?

Residential property includes the following:

• a house, a condominium unit, an apartment or flat;
• a service apartment and a small office home office (SOHO) and must be used only as dwelling house.

What are the conditions to be fulfilled?

Limit to 3 units of residential properties per individual.

Sale and purchase agreement (S&P) or the instrument of transfer (No S&P) must be executed from 01.06.2020, to 31.12.2021 and duly stamped not later than 31.01.2022.

If the disposal of the residential property is a conditional contract requiring the Federal Government or a State Authority’s approval, the exemption shall only applicable if:

• the contract must be executed from 01.06.2020, to 31.12.2021 and duly stamped not later than 31.01.2022.
• the approval is obtained on or after 1 June 2020.

The residential property which is being disposed is not acquired by way of:

• transfer between spouses; or
• a gift between spouses, parent and child, or grandparent and grandchild where the donor is a citizen; and

Do I need to file the RPGT form?

Yes, the disposer is still required to submit the relevant return or furnishing any other information under the RPGT Act 1976.

Sources

Real Property Gains Tax (Exemption) Order 2020

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