RPGT Disposal Computation (Malaysia)
REAL PROPERTY GAINS TAX (RPGT) — DISPOSAL COMPUTATION WORKSHEET
Real Property Gains Tax Act 1976 (Act 169) | Real Property Gains Tax (Exemption) Order 2022 | Finance Act 2022
Date of Computation: [Computation Date]
Prepared by: [Preparer Name]
PART A — DISPOSER AND PROPERTY DETAILS
Disposer Name: [Disposer Name]
NRIC / SSM Registration No.: [Disposer NRIC]
LHDN Tax Reference No.: [LHDN Tax Ref]
Disposer Status: [Disposer Status]
Property Address: [Property Address]
Title Number: [Title Number]
Acquisition Date: [Acquisition Date]
Disposal Date: [Disposal Date]
Holding Period: [Holding Period]
PART B — CHARGEABLE GAIN COMPUTATION
Disposal Price (RM): [Disposal Price]
Less: Acquisition Price (RM): ([Acquisition Price])
Permitted Expenses (Schedule 2, RPGT Act 1976):
Legal Fees and Stamp Duty on Acquisition (RM): [Legal Fees Acquisition]
Estate Agent Commission on Disposal (RM): [Agent Commission]
Renovation and Improvement Costs (RM): [Renovation Costs]
Other Permitted Expenses (RM): [Other Permitted Expenses]
Total Permitted Expenses (RM): ([Total Permitted Expenses])
Gross Chargeable Gain (RM): [Gross Chargeable Gain]
Less: Paragraph 2A Individual Exemption (RM): ([Individual Exemption])
Net Chargeable Gain (RM): [Net Chargeable Gain]
PART C — RPGT COMPUTATION AND RETENTION
Applicable RPGT Rate: [RPGT Rate]
RPGT Before Exemptions (RM): [RPGT Before Exemption]
Principal Residence Exemption Claimed: [Principal Residence Exemption]
Other Exemption Claimed: [Other Exemption]
Net RPGT Payable (RM): [Net RPGT Payable]
SECTION 21B RETENTION (CKHT 502)
Retention Rate: [Retention Rate]
Section 21B Retention Withheld by Acquirer (RM): [Retention Amount]
RPGT Payable vs Retention — Refund Due to Disposer (RM): [Refund Due]
Note: The acquirer must remit the Section 21B retention to LHDN via Form CKHT 502 within 60 days of the disposal date under Section 21B of the Real Property Gains Tax Act 1976 (Act 169). The disposer must file Form CKHT 1A within the same 60-day period to trigger processing of the RPGT liability and any retention refund. Late filing attracts a penalty of RM 500 to RM 10,000 under Section 29 of the Act.
DECLARATION
I, [Disposer Name], hereby declare that this RPGT disposal computation is true and correct to the best of my knowledge and belief, and that all figures are consistent with the Sale and Purchase Agreement, acquisition documents, and supporting receipts.
Signature: ____________________________
Name: [Disposer Name]
Date: [Computation Date]
Disposer / Authorised Representative
________________
Signature
What Is a RPGT Disposal Computation (Malaysia)?
A RPGT Disposal Computation in Malaysia records the structure and obligations of the financial arrangement it covers.
The RPGT disposal computation must account for the disposal price (generally the consideration stated in the Sale and Purchase Agreement, or the market value for deemed disposals), the original acquisition price, all permitted expenses claimable under Schedule 2 to the RPGT Act 1976, any RPGT exemptions under Schedule 3 to the Act, the applicable RPGT rate based on the holding period and the disposer's status, and the Section 21B retention mechanism by which the acquirer withholds 3% (for Malaysian citizens and permanent residents) or 7% (for non-citizens and companies) of the disposal price as a security deposit remitted directly to LHDN.
Following the Finance Act 2022 amendments effective from 1 January 2023, the RPGT rate structure in Malaysia is as follows. For Malaysian citizens and permanent residents: 30% for disposals within 3 years of acquisition; 20% for the 4th year; 15% for the 5th year; and 0% for disposals after 5 years pursuant to the Real Property Gains Tax (Exemption) Order 2022. For non-citizens (foreign individuals) and both Malaysian-incorporated and foreign companies: 30% within 3 years; 20% in the 4th year; 15% in the 5th year; and 10% after 5 years, under the Finance Act 2022.
Permitted expenses under Schedule 2 to the RPGT Act 1976 that reduce the chargeable gain include: legal fees and stamp duty paid on acquisition of the property; estate agent commission paid on the disposal (subject to limits); renovation and improvement costs substantiated by receipts and contractor invoices; and professional valuation fees where applicable. Financing costs (mortgage interest) are NOT permitted expenses under RPGT and cannot be included in the computation.
The once-in-a-lifetime principal residence exemption under Paragraph 2 of Schedule 3 to the RPGT Act 1976 allows a Malaysian citizen who disposes of a dwelling house that was their principal residence to exempt the entire chargeable gain from RPGT. This exemption is available once per individual lifetime. Additionally, every individual benefits from an automatic RM 10,000 or 10% of chargeable gain exemption (whichever is greater) under Paragraph 2A of Schedule 3, which reduces the net chargeable gain before applying the RPGT rate.
The disposal computation worksheet is particularly important for high-value property transactions, disposals involving improvements and renovation costs, cases where multiple permitted expense categories apply, and disposals by companies or non-citizens where the 10% post-5-year rate applies. LHDN has the power under Section 17 of the RPGT Act 1976 to substitute the market value of the property (as determined by the Valuation and Property Services Department, JPPH) for the stated disposal or acquisition price where the Director General considers that the stated price is not reflective of market value.
When Do You Need a RPGT Disposal Computation (Malaysia)?
An RPGT Disposal Computation worksheet is needed whenever a chargeable asset is disposed of in Malaysia and the disposer needs to calculate the correct RPGT liability before filing the CKHT 1A return with LHDN.
An RPGT Disposal Computation is required when a Malaysian property — residential, commercial, or industrial — is sold under a Sale and Purchase Agreement (SPA) and the disposer or their solicitor needs to verify the exact RPGT payable, the Section 21B retention amount, and whether any exemptions apply, before the CKHT 1A is filed. An accurate computation prevents LHDN raising a revised assessment for underpaid RPGT.
An RPGT Disposal Computation is needed when a property with significant renovation or improvement expenditure is disposed of, and the disposer needs to tabulate all permitted expenses with supporting receipts and invoices to maximise the legitimate reduction in chargeable gain. Without a detailed computation, renovation costs are frequently omitted, resulting in overpayment of RPGT.
An RPGT Disposal Computation is required when a non-citizen or a foreign company disposes of Malaysian property, since the 7% Section 21B retention and the 10% post-5-year RPGT rate apply rather than the 3% and 0% rates applicable to Malaysian citizens. The computation must clearly identify the disposer's status to apply the correct rate table under the Finance Act 2022 amendments.
An RPGT Disposal Computation is needed when a disposer intends to claim the once-in-a-lifetime principal residence exemption under Paragraph 2 of Schedule 3 to the RPGT Act 1976. The computation must demonstrate the chargeable gain before exemption, the full qualifying conditions (Malaysian citizen, dwelling house, principal residence), and the resulting nil RPGT liability.
An RPGT Disposal Computation is required in corporate real property company (RPC) share transactions, where the shares are treated as chargeable assets under the RPGT Act 1976. The computation must identify the acquisition price and disposal price of the RPC shares, the holding period, and the applicable RPGT rate, since the standard property transaction rules apply to RPC shares under Section 3 and Schedule 2 of the RPGT Act 1976.
What to Include in Your RPGT Disposal Computation (Malaysia)
A complete RPGT Disposal Computation for Malaysia must contain the following essential elements.
Disposer and Property Identification: The disposer's full legal name, NRIC or SSM registration number, LHDN income tax reference number, and residency status must be stated. The property's full address, title number (lot number, title type — Geran, Pajakan, or Mukim), area, and the state in which it is situated must be recorded. The disposal date (SPA date) and acquisition date must be clearly stated as they determine the holding period.
Disposal Price: The actual disposal price agreed in the SPA or, for deemed disposals (gifts at market value, court-ordered transfers), the market value determined by a registered valuer under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (LPPEH Act 1981) must be stated. Where LHDN substitutes market value under Section 17 of the RPGT Act 1976, the JPPH valuation figure is used.
Acquisition Cost: The original acquisition price (SPA price or probate value for inherited property) is deducted from the disposal price. For inherited property, the acquisition cost is the market value at the date of death of the deceased, as this is the deemed acquisition cost under Schedule 2 to the RPGT Act 1976.
Permitted Expenses Schedule: A detailed schedule of all permitted expenses under Schedule 2 — with amounts and supporting documents — including stamp duty and legal fees paid on acquisition, estate agent commission on the disposal, renovation invoices, and improvement costs. Total permitted expenses are deducted from the disposal price to arrive at the net disposal consideration before computing the chargeable gain.
Chargeable Gain Calculation: The chargeable gain equals the net disposal consideration (disposal price less permitted expenses) minus the acquisition cost. The Paragraph 2A individual exemption (RM 10,000 or 10% of chargeable gain, whichever is greater) is applied to the chargeable gain to arrive at the net chargeable gain before RPGT.
RPGT Rate Application: The applicable RPGT rate — 0%, 10%, 15%, 20%, or 30% — is applied based on the holding period and the disposer's status (Malaysian citizen/PR, non-citizen, or company) under the rate table in Section 3 and the Finance Act 2022 amendments.
Exemption Declaration: Any exemption claimed — principal residence exemption under Paragraph 2 of Schedule 3, spousal gift exemption under Paragraph 2 of Schedule 4, the parent-to-child transfer exemption under the RPGT (Exemption) Order 2023, or a compulsory acquisition exemption — must be declared with the specific legal basis.
Section 21B Retention Statement: The retention amount withheld by the acquirer (3% for citizens/PRs, 7% for non-citizens/companies) must be calculated and stated, together with the net RPGT payable by the disposer after set-off of the retention against the assessed RPGT.
Additional compliance elements for a RPGT Disposal Computation (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). RPGT Disposal Computation (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/real-estate/purchase-sale/rpgt-return-disposal-malaysia
"RPGT Disposal Computation (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/real-estate/purchase-sale/rpgt-return-disposal-malaysia.
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author = {{Forms Legal}},
title = {RPGT Disposal Computation (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/real-estate/purchase-sale/rpgt-return-disposal-malaysia}},
note = {Free legal document template. Based on National Land Code 1965 (Act 56)}
}Frequently Asked Questions
The chargeable gain for RPGT purposes in Malaysia is calculated under Schedule 2 to the Real Property Gains Tax Act 1976 (Act 169) as follows: Disposal Price minus Acquisition Price minus Permitted Expenses equals Gross Chargeable Gain. For individual disposers (Malaysian citizens and permanent residents), the gross chargeable gain is further reduced by the Paragraph 2A of Schedule 3 individual exemption — being the greater of RM 10,000 or 10% of the chargeable gain — to arrive at the net chargeable gain. RPGT at the applicable rate is then applied to the net chargeable gain. The disposal price is generally the SPA consideration. The acquisition price is the original purchase price or the probate market value (for inherited property). Permitted expenses include legal fees and stamp duty on acquisition, estate agent commission (capped), renovation costs (with receipts), and professional valuation fees. Mortgage interest and income tax are NOT permitted expenses. Where LHDN considers the stated price does not reflect market value, Section 17 of the RPGT Act 1976 empowers LHDN to substitute the JPPH market valuation.
Under Schedule 2 to the Real Property Gains Tax Act 1976 (Act 169), permitted expenses that reduce the chargeable gain for RPGT in Malaysia include costs incurred wholly and exclusively in enhancing the value of the asset — primarily renovation and improvement costs substantiated by contractor invoices, purchase receipts, and bank payment evidence. Examples of allowable renovation costs include structural work (extensions, additional rooms), kitchen or bathroom renovation, major electrical or plumbing upgrades, flooring replacement, air-conditioning installations, built-in wardrobes, and landscaping that enhances the property's value. Maintenance and repair expenditures (painting, minor repairs, replacing like-for-like fixtures) are NOT allowable as permitted expenses — they are revenue maintenance, not capital improvement. The distinction between capital improvement (allowable) and revenue maintenance (not allowable) is based on whether the expenditure adds to the asset's value or merely maintains its existing condition. LHDN may disallow renovation claims unsupported by invoices or where the claimed costs appear inconsistent with the property type. Professional valuation fees paid to a registered valuer under the LPPEH Act 1981 for the purpose of the disposal are also allowable. Estate agent commission on the disposal (at the standard prescribed rate under the BOVAEA) is allowable. Loan interest, fire insurance premiums, and property assessments are NOT permitted expenses.
A 0% RPGT rate applies to Malaysian property disposals in 2024 and 2025 under the Real Property Gains Tax (Exemption) Order 2022 when the disposer is a Malaysian citizen or permanent resident (PR) who has held the property for more than 5 years from the date of acquisition. The holding period is measured from the acquisition date to the disposal date (generally both being SPA signing dates under Schedule 2 to the RPGT Act 1976). A Malaysian citizen selling a residential property acquired in January 2018 for a disposal in February 2024 — a holding period of over 6 years — would therefore attract 0% RPGT and have no RPGT liability. Note that even at 0% RPGT, both the disposer (CKHT 1A) and acquirer (CKHT 1B) must still file their CKHT forms with LHDN within 60 days of the disposal date and declare the 0% rate and the applicable exemption order. The acquirer must also remit the 3% Section 21B retention to LHDN within 60 days, which LHDN will then refund to the disposer upon processing the CKHT 1A return. The 0% rate does NOT apply to non-citizens or companies — they are subject to a 10% RPGT rate for disposals after 5 years under the Finance Act 2022.
If no RPGT is payable by the disposer — for example, because the property was held for more than 5 years by a Malaysian citizen (0% RPGT rate under the RPGT (Exemption) Order 2022) or because the principal residence exemption under Paragraph 2 of Schedule 3 to the RPGT Act 1976 applies — LHDN will refund the Section 21B retention amount to the disposer after processing the CKHT 1A return. The acquirer must still withhold and remit the 3% retention (for Malaysian citizens/PRs) to LHDN via Form CKHT 502 within 60 days of the disposal date, even if the disposer will ultimately receive a full refund. LHDN does not automatically refund the retention without the disposer filing the CKHT 1A return and claiming the exemption or nil RPGT — the disposer must actively file to trigger the refund. Processing times for RPGT refunds at LHDN vary from 3 to 9 months depending on the LHDN branch workload. Disposers may track refund status through the MyTax portal (mytax.hasil.gov.my) or by contacting the relevant LHDN RPGT Unit. For non-citizens and companies, the 7% retention similarly is refunded if the assessed RPGT is lower than the retention withheld.
RPGT for inherited property in Malaysia is calculated under Schedule 2 to the Real Property Gains Tax Act 1976 (Act 169) with the following rules. The receipt of inherited property by a beneficiary upon the death of the deceased is NOT treated as a disposal under the RPGT Act 1976 — no RPGT is triggered at the date of inheritance. Instead, the beneficiary is deemed to have acquired the property at its market value on the date of death of the deceased, under the deemed acquisition price rules in Schedule 2. This market value on the date of death becomes the beneficiary's acquisition cost for future RPGT computation. The holding period for RPGT rate purposes starts from the date of death (the deemed acquisition date), not from when the beneficiary registered the property transfer or when the original deceased acquired the property. When the beneficiary subsequently disposes of the inherited property, the chargeable gain is calculated as the disposal price minus the market value at date of death (acquisition cost) minus permitted expenses. The applicable RPGT rate depends on the beneficiary's own holding period from the date of death and their residency status. A beneficiary who disposes within 2 years of the date of death will attract the 30% rate; after 5 years as a Malaysian citizen will attract 0% under the RPGT (Exemption) Order 2022.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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RPGT Return Form CKHT 1A/1B (Malaysia)
Real Property Gains Tax (RPGT) Return Form CKHT 1A (disposer) and CKHT 1B (acquirer) filed with LHDN within 60 days of a chargeable property disposal in Malaysia under the Real Property Gains Tax Act 1976. Covers rates of 0%–30% depending on holding period and disposer status.
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