If you own residential or commercial real estate in Malaysia and are considering a sale, Real Property Gains Tax (RPGT) is the most material cost variable you must quantify before listing. Administered by the Inland Revenue Board (LHDN), RPGT is levied on the chargeable gain — the disposal price minus the adjusted acquisition cost — with rates that vary dramatically by holding period, residency, and Budget 2026 reliefs. This guide covers the full 2026 RPGT schedule, exemptions, stamp duty, legal fees, and a concrete RM1,000,000 disposal cost breakdown.
RPGT Rate Schedule 2026: Sliding Scale by Holding Period
Malaysia's holding-period-based RPGT framework discourages short-term speculation while rewarding long-term ownership. The acquisition date is the date the incoming Sale and Purchase Agreement (SPA) is stamped, not the key handover date. Disposal date is the outgoing SPA signing date.
Malaysian Citizens and Permanent Residents (PR)
| Holding Period | RPGT Rate on Chargeable Gain |
|---|---|
| Year 1 (0–12 months) | 30% |
| Year 2 (13–24 months) | 20% |
| Year 3 (25–36 months) | 15% |
| Year 4 (37–48 months) | 10% |
| Year 5 (49–60 months) | 10% |
| Year 6+ (61+ months) | 0% |
Non-Citizens, Non-PR Foreign Individuals, and Foreign Companies
| Holding Period | RPGT Rate on Chargeable Gain |
|---|---|
| Years 1–5 | 30% |
| Year 6+ | 10% |
Citizens and PRs enjoy full RPGT exemption from year six, while foreigners face a permanent 10% floor. For a foreigner selling a condo held seven years with a RM250,000 gain, RPGT is RM25,000 — a cost absent for a citizen in the same position.
Budget 2026 (MoF) RPGT and Related Changes
The Ministry of Finance announced the following property-related amendments effective 1 January 2026:
- Lifetime PPR exemption extended indefinitely: The one-off lifetime RPGT relief for disposal of a single private residence by a Malaysian citizen, previously sunsetting December 2025, is now permanent. The home must have been occupied by the owner, spouse, or children as principal residence for at least three of the five years preceding sale.
- MSSS/M40 low-cost disposals remain exempt: Disposals of RM300,000-and-under residential properties by 2020–2025 MSSS homeowners remain RPGT-exempt at any holding length, extended through 31 December 2027.
- First-time buyer stamp duty cap extended: MOT stamp duty exemption on the first RM500,000 of value for first-time Malaysian purchasers is extended through 31 December 2027, indirectly supporting secondary market liquidity for sellers.
The headline RPGT rate tables remain unchanged from 2024/2025.
RPGT Exemptions and Allowable Deductions
Key statutory exemptions and deductions:
- Principal private residence (PPR): One lifetime exemption per Malaysian citizen. Joint owners each claim one exemption on the same property.
- Affordable scheme disposals: Properties under RM200,000 classified as PR1MA, RUMAWIP, PPRT, Rumah Selangorku, or equivalent state schemes are RPGT-exempt for citizens at any holding length.
- Family gifts: Transfers between spouses, parent-child, grandparent-grandchild, and siblings are RPGT-exempt (no monetary consideration; LHDN Form 22A required).
- Inherited property: Treated as no-gain/no-loss; the heir inherits the original owner's acquisition date and cost base.
- Allowable deductions against chargeable gain: Stamp duty and legal fees on acquisition, receipted renovation and structural improvement costs (architects' fees, plan approvals, extensions), agent commission (max 3% residential), valuation fees, and buyer/tenant advertising costs.
Stamp Duty on Transfer (MOT) 2026 Scale
MOT stamp duty is technically a buyer cost, but sellers should understand it to negotiate pricing accurately. The 2026 tiered schedule (non first-time):
| Property Value Bracket | Stamp Duty Rate |
|---|---|
| First RM100,000 | 1% |
| RM100,001–RM500,000 | 2% |
| RM500,001–RM1,500,000 | 3% |
| Above RM1,500,001+ | 4% |
First-time Malaysian citizens enjoy 100% MOT exemption on RM500,000-and-under homes (SPA before 31 Dec 2027), with partial relief up to RM1M.
Legal Fees: Sale SPA 2026 Scale
Solicitors' fees follow the Solicitors' Remuneration Order 2023 (SRO 2023) 2026 amendments, residential sale SPA:
| Transaction Value | Legal Fee (excl. 8% SST) |
|---|---|
| First RM500,000 | 1.00% (min RM500) |
| RM500,001–RM1,000,000 | 0.80% |
| RM1,000,001–RM3,000,000 | 0.70% |
| RM3,000,001–RM5,000,000 | 0.60% |
| Above RM5,000,000 | 0.50% (negotiable) |
Allow RM1,500–RM3,500 extra for disbursements (searches, Land Office attendance, stamping, discharge, courier).
Sample Cost Breakdown: RM1,000,000 Property Disposal
Scenario: Malaysian citizen sells a RM1,000,000 freehold condo held 4 years 2 months (Year 5, 10% RPGT band). Original price RM750,000; acquisition stamp duty RM16,000; acquisition legal RM8,000; receipted renovations RM65,000; agent 3%.
Chargeable Gain Computation
| Component | RM |
|---|---|
| Disposal price | 1,000,000 |
| Less: Agent commission (3%) | –30,000 |
| Net disposal | 970,000 |
| Less: Purchase price | –750,000 |
| Less: Acquisition stamp duty | –16,000 |
| Less: Acquisition legal fees | –8,000 |
| Less: Qualified renovation | –65,000 |
| Chargeable gain | 131,000 |
RPGT Payable
131,000 × 10% = **RM13,100
Seller-Side Transaction Costs
| Item | RM |
|---|---|
| RPGT | 13,100 |
| Sale SPA legal (SRO scale + 8% SST) | 9,720 |
| Legal disbursements | 2,400 |
| Stamping (SPA + RPGT Form 1) | 300 |
| Agent commission (3%) | 30,000 |
| Quit rent / assessment (pro-rated) | 380 |
| Bank redemption processing fee | 150 |
| Total seller costs | 56,050 |
Net Proceeds (before loan redemption)
RM1,000,000 – RM56,050 = **RM943,950
Final Notes
A two-month listing delay can move you from the 20% Year 2 band to 15% Year 3 band — thousands in savings. Foreign sellers: purchasers' lawyers typically withhold 3% of the gross sale price for RPGT remittance unless advance LHDN clearance is secured. Joint owners are assessed individually on their proportional share, each eligible for their own exemptions. Always model worst- and best-case scenarios before accepting a Letter of Offer.