The New Era of RPGT in Malaysia: Self-Assessment and Digital Filing in 2025
Effective January 1, 2025, the landscape of Real Property Gains Tax (RPGT) in Malaysia has undergone a fundamental shift. The Inland Revenue Board of Malaysia (LHDN) has implemented a mandatory self-assessment system for RPGT, moving the responsibility for tax calculation and payment squarely onto the taxpayer. This is coupled with the compulsory use of the e-CKHT electronic platform for all RPGT filings, marking a significant step in the digitalization of Malaysia's tax administration.
The Self-Assessment System and e-CKHT Filing
The new system introduces several key changes:
- Taxpayer Responsibility: Under the self-assessment system, property sellers (disposers) are now responsible for accurately calculating their chargeable gain and RPGT payable. LHDN will no longer issue a formal notice of assessment.
- Mandatory Electronic Filing: All RPGT return forms (CKHT 1A for the disposer, CKHT 2A for the acquirer, and CKHT 3 for exemptions) must be submitted electronically via the e-CKHT platform on the MyTax portal. Manual submissions are no longer accepted.
- Filing and Payment Deadlines: The deadline for filing the RPGT return remains 60 days from the date of disposal. However, the deadline for the payment of the tax has been extended to 90 days from the date of disposal.
RPGT Rates for 2025
The RPGT rates for 2025 are tiered based on the holding period and the status of the disposer:
Malaysian Citizens & Permanent Residents
- Disposal within 3 years: 30%
- Disposal in the 4th year: 20%
- Disposal in the 5th year: 15%
- Disposal in the 6th year and onwards: 0%
Foreigners & Non-Permanent Residents
- Disposal within 5 years: 30%
- Disposal in the 6th year and onwards: 10%
Companies
- Disposal within 3 years: 30%
- Disposal in the 4th year: 20%
- Disposal in the 5th year: 15%
- Disposal in the 6th year and onwards: 10%
Key Exemptions and Reliefs
Several important exemptions can reduce or eliminate your RPGT liability:
- Once-in-a-Lifetime Private Residence Exemption: Malaysian citizens are entitled to a one-time full exemption on the chargeable gain from the disposal of one private residence.
- General Exemption: An exemption of RM10,000 or 10% of the chargeable gain (whichever is higher) is available for each disposal.
- Family Transfers: Transfers of property between spouses, or from parents to children (and vice versa), or from grandparents to grandchildren (and vice versa) are generally exempt from RPGT, provided the transferor is a Malaysian citizen.
Calculating Your RPGT Liability
Under the self-assessment system, it is crucial to know how to calculate your RPGT liability correctly:
- Determine the Disposal Price: This is the sale price of the property.
- Determine the Acquisition Price: This is the original purchase price plus any incidental costs (e.g., stamp duty, legal fees).
- Deduct Allowable Expenses: You can deduct costs incurred to enhance or preserve the value of the property (e.g., renovations) and costs related to the disposal (e.g., agent fees, legal fees).
- Calculate the Chargeable Gain: Disposal Price - Acquisition Price - Allowable Expenses.
- Apply the Exemption Waiver: Deduct the greater of RM10,000 or 10% of the chargeable gain.
- Compute the Tax Payable: Multiply the net chargeable gain by the applicable RPGT rate.
RPGT vs. Capital Gains Tax (CGT)
It is important to distinguish RPGT from the new Capital Gains Tax (CGT) that was introduced in 2024. In simple terms:
- RPGT applies to the gains from the direct disposal of real property (land and buildings).
- CGT applies to the gains from the disposal of unlisted shares in a company. This includes shares in Real Property Companies (RPCs), which were previously covered under the RPGT Act.
Conclusion
The move to a mandatory self-assessment system and e-filing for RPGT in 2025 represents a major shift in tax administration in Malaysia. It places a greater responsibility on taxpayers to understand the law, calculate their tax liability accurately, and maintain complete records. With the LHDN also introducing a new RPGT Audit Framework for 2025, compliance is more important than ever. Taxpayers should be proactive in understanding their obligations to ensure a smooth and compliant property disposal process.