Short answer: RPGT is a tax on the profit when you sell Malaysian property. A non-citizen who sells within the first five years pays 30% on the gain, and 10% from the sixth year onward. Citizens and permanent residents pay 30% / 20% / 15% in years 1-5 and nothing from year 6. When a foreigner sells, the buyer must retain 7% of the price and pay it to the tax authority (LHDN) within 60 days.
Last verified: 16 October 2026 against the Inland Revenue Board (hasil.gov.my) guidance. This is a planning guide, not legal, tax or financial advice. Confirm with a Malaysian tax adviser before you sell.
RPGT rates by holding period
The rate depends on who sells and how long they have owned the property (counted by disposal year).
| Year of disposal | Citizen / PR (individual) | Malaysian company | Non-citizen, non-PR |
|---|---|---|---|
| Years 1-3 | 30% | 30% | 30% |
| Year 4 | 20% | 20% | 30% |
| Year 5 | 15% | 15% | 30% |
| Year 6 onward | 0% | 10% | 10% |
What counts as the gain
The taxable gain is roughly the selling price minus your acquisition price and allowable costs (legal fees, stamp duty, agent fees, qualifying improvements). Individuals can deduct an exemption of RM10,000 or 10% of the gain, whichever is higher, per disposal.
The 7% retention when a foreigner sells
If the seller is a non-citizen and non-permanent resident, the buyer retains 7% of the total price. For citizens and permanent residents the retention is 3%. The buyer pays the retained amount to LHDN within 60 days of the disposal date and carries the penalty if it is late. The retention is a deposit against the tax, not the final bill: the final RPGT is worked out when the seller files, and any excess is refunded.
Common exemptions
- Citizens and PRs who have held a property for six years or more owe no RPGT.
- A once-in-a-lifetime exemption for a private residence applies to citizens and PRs.
- Transfers between spouses, parents and children, and grandparents and grandchildren can be exempt when the transferor is a Malaysian citizen.
- Foreigners generally do not get the once-in-a-lifetime residence exemption.
What this means for a Johor Bahru buyer
- If you plan to flip within five years, the 30% rate removes most of a typical gain. Treat any under-construction purchase as a hold of at least six years.
- Even after year six, a foreign seller still pays 10% on the gain, so include it when you compare Johor Bahru yields with other markets.
- Keep every receipt for legal fees, stamp duty and renovations. They reduce the gain.
- Budget the purchase-side costs too: see the stamp duty and legal fees guide and the foreign buyer guide for Johor.
- If you will rent the unit out first, read renting out a Johor property as a foreign owner.
FAQ
Do foreigners pay RPGT in Malaysia?
Yes. Non-citizens pay 30% on gains if they sell within five years and 10% from year six.
Is there RPGT after six years?
For citizens and PRs, no. For foreigners and companies, 10%.
Who pays the 7% retention?
The buyer withholds it from the price and pays it to LHDN. It comes out of the foreign seller’s proceeds.
How long do I have to file?
60 days from the date of the sale agreement (or completion if there is no written agreement).
Does RPGT apply to new launch purchases?
It applies when you later dispose of the property, including selling before completion.
Sources: Inland Revenue Board of Malaysia (hasil.gov.my) RPGT guidance; Real Property Gains Tax Act 1976.
