Effective next year under Budget 2022, says Minister of Finance Tengku Zafrul Aziz, the government will no longer collect real property gains tax (RPGT) on properties disposed of during the sixth year of ownership and onwards.
According to Zafrul, this will apply to Malaysians, permanent residents, and foreigners alike while previously. Malaysians and permanent residents still had to pay a 5% RPGT on properties sold even if they had owned them for more than five years.
Foreigners, on the other hand, must pay 10% but this will no longer be the case.
Regarding the disposition of properties in five years or fewer, Malaysians and permanent residents are currently required to pay a 30% tax on any profit made from the sale of properties held for less than three years.
In the fourth year, this is lowered to 20%, and in the fifth year, it is cut to 15%, 20 percent in the fourth year and 15 percent in the fifth year.
For foreigners, the RPGT is 30 percent if a property is sold in the first five years of ownership. The RPGT was introduced to avoid speculation of properties.
