Stamp Duty & Real Property Gains Tax Regime 2022 in Malaysia
The Real Estate Laws Series . 23 December 2022
Real Property Gains Tax (RPGT) is a form of taxation on the profits made from disposing of a real property. In Malaysia, it is administered by the Inland Revenue Board. The RPGT rate depends on several factors, such as how long the property is held, the type of property and whether it is a residential or commercial property. This report provides an in-depth review of all the GST and exemptions, stamp duty rates and stamp duties exemptions related to the acquisition of real property in Malaysia for the year 2022.
RPGT RATE AND EXEMPTIONS
The RPGT rate for disposing of real property in 2022 is as follows:
• For properties acquired before 1st January 2000, both residential and commercial properties are exempt from RPGT.
• For properties acquired between 1st January 2000 and 31st December 2021, the RPGT rate is:
o 20% for the first three years of ownership
o 15% for years 4-5
o 10% for year 6 onwards.
Exemptions are available for certain property disposals, including:
• Disposal of inherited properties
• Disposal of personal-use properties
• Disposal of properties used as government offices
• Disposal of properties used in an approved charitable or religious organization
• Disposal of properties acquired or developed for housing purposes
• Disposal of properties acquired with intention to re-develop the property within three years
• Disposal of property by a developer or approved real estate scheme.
STAMP DUTY RATE AND EXEMPTIONS
Stamp duty on conveyances or transfers of real property in Malaysia is based on the value or consideration of the property and is paid by the purchaser. The stamp duty rate for 2022 is as follows:
• For properties valued up to RM 100,000 – no stamp duty is required
• For properties valued between RM100,000 and RM500,000 – stamp duty of 1% is required
• For properties valued over RM500,000 – stamp duty of 2% is required
Exemptions from stamp duty may be obtained for certain properties, including:
• Transfer of properties between spouses
• Transfer of properties between parents and children
• Transfer of properties between siblings
• Transfer of property in connection with a deceased’s estate
• Transfer of properties used in an approved charitable or religious organization
• Transfer of properties acquired with intention to re-develop the property within three years
• Transfer of property by a registered developer or approved real estate scheme.
This is an overview of the Malaysian RPGT, rand Stamp Duty rates, and exemptions for the acquisition of real property in 2022. Although the RPGT and stamp duty rates remain unchanged from previous years, there are still exemptions available in certain specific cases. It is important for individuals looking to invest in real estate in Malaysia to understand what these tax implications are and how to avail of the available exemptions.