Real Property Gains Tax In the Budget 2013, the government is proposing the RPGT be increased to 15% from the current 10% on all properties sold before two years from the date of purchase and to 10% from 5% for properties sold between the third and fifth year. The new rates are effective Jan 1, 2013. There will be no tax on property disposed after the fifth year. In the Budget 2010, Government has re-imposed the Real Property Gains Tax (RPGT). Real Property Gains are gains derived from disposal, sell, convey, assign, transfer, settle or alienate whether by agreement or by force of law which fall under chargeable asset. All chargeable assets must be made during the year of assessment and all particulars must be furnished as requested. Example to illustrate the calculation of RPGT payable (effective from 1 Jan 2013) Ms Lee purchased a property on year 2010 at RM100,000 and sold on 1st JAN 2013 at RM200,000 (3 years from the date of purchase). She made RM100,000 from the transaction and the gains are subject to 10% RPGT and the calculation will be: RM100,000 (Property Gains) – RM10,000 (Waived Exemption) = RM90,000 (Taxable Gains) RM90,000 (Taxable Gains) x 10% (RPGT Rate) = RM9,000. (RPGT Chargeable) Thus, the RPGT chargeable to Ms Lee will be RM9,000. Allowable Loss Allowable loss means a loss made after the disposal. Tax relief shall be allowed in respect of the following accrued: 1.If the disposal price is less than the acquisition price. 2.If the disposal price is equal to the acquisition price Exemption (under Real Property Gains Tax (Exemption) Order 2009) The flat 5% RPGT for the 1st five years will be implemented through the Real Property Gains Tax (Exemption) Order 2009. This Order has gazetted and take effective since 1st JAN 2010. Therefore, the existing rate of RPGT, which is within 30% to 5% as in Schedule 5 of the Real Property Gains Tax 1976, will no longer be applicable. However, there are three circumstances where the property owner is exempted from the 5% RGPT. * The level of exemption is increased from RM5,000 to RM10,000 or 10% of the chargeable gains, which ever is the higher * Gifts between parent and child, husband and wife, grandparent and grandchild; and * disposal of a residential property once in a lifetime.
Posted on: Sat, 17 Aug 2013 23:26:09 +0000
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