In the Budget 2014, the government is proposing the RPGT be

increased to 30% from the current 15% on all properties sold

before three years from the date of purchase and whereas for
disposals within the holding period up to 4 and 5 years, the
rates are increased to 20% and 15%, respectively. For disposals
made in the sixth and subsequent years, no RPGT is imposed on
citizens, whereas companies are taxed at 5%.

Real Property Gain Tax (RPGT) is a tax imposed on gains from
disposal of all types of properties such as residential and
commercial buildings, land and shares of real property
companies. RPGT is imposed on the net gains from disposal of
property after deducting the following costs:-

1. Acquisition price
2. Stamp duty
3. Legal fees
4. Renovation costs
5. Commission for sales and administrative payments

The following RPGT exemptions which were implemented under
the previous regime continue to be available:

(a) RPGT exemption on gains from the disposal of one
residential
property once in a lifetime to individuals;

(b) RPGT exemption of up to RM10,000 or 10% of the net gains,
(whichever is higher) from the disposal of real property by
individuals;

and

(c) RPGT exemption on gains arising from the disposal of real
property between family members (e.g. husband and wife,
parents and children, and grandparents and grandchildren).

The current RPGT rates vary from 0% to 30%, depending on the
holding period. The holding period refers to the period between
the acquisition date and the disposal date of the property.
To further curb speculative activities, the RPGT rates on
disposal of properties and shares in real property companies
effective 1 January 2014 shall be as follows:-
Disposal
(from purchased date)
Company
Individual
(Citizen &
PR)
Individual
(Non Citizen)
1st 3 years 30% 30% 30%
in 4th year 20% 20% 30%
in 5th year 15% 15% 30%
After 5th year 5% 0 5%

Example To Illustrate Calculation Of RPGT

Disposal Price on 2 Jan 2014 300,000
Less: Renovation/extension costs 20,000
Legal fees 3,000 23,000 277,000
Acquisition Price on 1 Jan 2012 200,000
Add: Duty stamp paid 3,000
Legal fees 2,500 5,500 205,500
Profit 71,500
Less: Exemption of RM10,000 or 10% of the
chargeable gain, whichever is greater
7,150
(-10,000)
Chargeable gain 61,500
Rate of RPGT 30% applied for disposal in 1st 3 years after the date of
acquisition.
RPGT on RM61,500 @ 30% = RM18,450