Updates on Real Property Gain Tax (RPGT) 2022
One of the highlights of the Budget 2022, proposed by Tengku Datuk Seri Zafrul Abdul Aziz, our Minister of Finance, is that the disposal of real property by individual citizens and permanent residents (Part I as below) starting from the Sixth (6) years and above will be removed.
Section 30 of the Finance Bill 2021 [1] has also proposed to differ the retention sum payable by the disposer company to Five (5) per cent of the total value of the consideration, in relation to the disposal within a period of Three (3) years after the acquisition date of the chargeable asset.
The RPGT rates as per Schedule 5 of the Real Property Gains Tax Act 1976 (“RPGT Act”) as follows with effect from 1 January 2022:
| PERIOD | TAX RATE FOR YEAR OF ASSESSMENT 2022 | ||
|---|---|---|---|
| PART I | PART II | PART III | |
Other than Part II and Part III [eg: individual, partnership, executor of the estate of a deceased person who is a citizen or a permanent resident] | Company incorporated in Malaysia or trustee of a trust [eg: company, co-operative, association, society and organisation] | Individual who is not a citizen and not a permanent resident, or an executor of the estate of a deceased person who is not citizen and not a permanent resident, or a company not incorporated in Malaysia | |
| Disposal within 3 years after the date of acquisition | 30% | 30% | 30% |
| Disposal in the 4th year after the date of acquisition | 20% | 20% | 30% |
| Disposal in the 5th year after the date of acquisition | 15% | 15% | 30% |
| Disposal in the 6th year after the date of acquisition | 0% | 10% | 10% |
CONCLUSION
With the recent implementation coming from the rationale of the Budget 2022 to not impose RPGT for the disposal of property by individual citizens and permanent residents, clearly is to boost the transaction in property sector in view that our country is in the economy recovery state post COVID-19 lockdown.
[1] https://www.parlimen.gov.my/bills-dewan-rakyat.html?uweb=dr&lang=en
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