Exemption from Real Estate Profits Tax in 4 Cases (update)
For the time being, the government has no plans to repeal all property profits taxes!
According to a message released by Finance Minister Datuk Seri Tengku Zafrul last year, the government will not repeal all property gains taxes for the time being in order to combat domestic real estate speculation. Property gains tax will not apply to sales of properties owned for more than six years starting in 2022.
The government will not levy property gains tax in three situations, according to Zafrul: when a citizen or permanent resident sells a private property for the first time, when a local citizen donates the output to a husband or wife, parents, children, grandparents, and grandchildren, and when a local citizen donates the output to a husband or wife, parents, children, grandparents, and grandchildren. A situation of property gained through a will also exists.
In addition to the three scenarios listed above, those who sell homes they have owned for at least six years are exempt from paying Real Property Gains Tax (RPGT).
Furthermore, Malaysian nationals and permanent residents must pay a 30 percent property gains tax when selling a home they have owned for less than three years, and 20 percent and 15 percent for homes sold in the fourth and fifth years, respectively. Profit tax is a tax on profits. When foreigners sell homes they have owned for less than five years, they must pay a property profit tax of 30%.
2022 Property Profit Tax Rate
Malaysian Citizens and Permanent Residents
Hold for less than 3 years: 30%
Hold for 4 years: 20%
Hold for 5 years: 15%
Hold for 6 years or more: 0%
Foreigner
Hold for 5 years or less: 30%
Hold for 6 years or more: 10%
