At the Invest Malaysia 2007 event, Prime Minister Datuk Seri Abdullah Ahmad Badawi announced the exemption of RPGT; effective from 1st April 2007.  With this exemption, no tax is chargeable and both the disposer and acquirer will not be required to file the forms referred to as CKHT 1 and 2 for any sale and purchase of property.

Prior to the exemption, Malaysia has capital gains tax levied on taxable gains from disposal of real property and shares in real property companies by residents and non-residents.  The tax is governed by the Real Property Gains Tax Act ( Act 169).  The taxable gain is the difference between acquisition price and disposal price of real property with appropriate allowances given in the transaction.  The RPGT rates were previously as follows:

INDIVIDUAL OWNERSHIP (MALAYSIAN CITIZEN / PERMANENT RESIDENT)
Category of Disposal In Number of Years
Rate of Tax
Disposal within two (2) years after the date of acquisition
30%
Disposal in 3rd year after date of acquisition
20%
Disposal in 4th year after date of acquisition
15%
Disposal in 5th year after date of acquisition
5%
Disposal in 6th year after date of acquisition or thereafter
Nil
  
COMPANY OWNERSHIP
Category of Disposal In Number of Years
Rate of Tax
Disposal within two (2) years after the date of acquisition
30%
Disposal in 3rd year after date of acquisition
20%
Disposal in 4th year after date of acquisition
15%
Disposal in 5th year after date of acquisition
5%
  
INDIVIDUAL OWNERSHIP (NON-CITIZEN / NON-PERMANENT RESIDENT)
Category of Disposal In Number of Years
Rate of Tax
Disposal within 5 years after date of acquisition
30%
Disposal in 6th year after date of acquisition or thereafter
5%