WHAT’S REAL PROPERTY GAIN TAX

Capital gains are generally not subject to tax in Malaysia. Real property gain tax is charged on gains arising from the disposal of real property situated in Malaysia or of interest, options or other rights in or over such land as well as the disposal of shares in real property companies.

Malaysian are subject to a 30% tax if they sell the property within two years, with a reducing rate until 5% in the sixth year and thereafter. Foreigners on the other hand, pay a flat rate of 30% if they sell within five years, and thereafter at the rate of 5%.

However, effective 1 April 2007, the Malaysian government has abolished the real property gain tax and the limit imposed on property loans to foreigners which is currently restricted to three, has been removed.