Guide to taxes

With a relatively low income tax rate and few other taxes, Malaysia is an incredibly tax-friendly country.

The Real Property Gains Tax (RPGT) is an unavoidable fact when you are considering selling your property. RPGT is actually a form of Capital Gains Tax on chargeable gains derived from the disposal of real property. Capital Gains Tax is actually a tax on the profit when you sell (or ‘dispose of’) something that’s increased in value.

It is important to know how much the RPGT is and what is means because it could be the deciding factor in deciding whether to sell now or later. A chargeable gain is the profit when the disposal price is more than purchase price of the property.

Any vendor who sells their property is required to pay RPGT. The current prescribed tax rate is as follows. (See table)

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The net rental (and other) income of nonresidents is taxed at a flat rate of 26%, without any personal relief.
For the Malaysian citizen and permanent resident individuals, any property disposed within the first five (5) years of purchase is subjected to RPGT. Beyond that, there is no RPGT imposed. For non-residents, real property gains tax (RPGT) is levied on disposals of properties held for more than five years at a flat rate of 5%. As of 2014, RPGT rates apply differently for citizens, non-citizens, and companies.