REAL PROPERTY GAIN TAX

REAL PROPERTY GAIN TAX

WAN AZILAH WAN YUNUS
ZURAINI ABDUL HADI

MUZIRAWATI MD MUSTAFA

Politeknik Kota Bharu

i

Published and printed by:
Department of Commerce
Politeknik Kota Bharu
KM24 Kok Lanas, 16450
KeterehKelantan.
www.pkb.edu.my

REAL PROPERTY GAIN TAX

First Edition 2022
© 2022 Wan Azilah Wan Yunus, Zuraini Abdul Hadi & Muzirawati Md Mustafa

All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical,
photocopying, recording or otherwise without the prior written permission of the
copyright holder.

ii

PREFACE

Tax laws are never easy to comprehend, even by expert and lay taxpayers. Taxpayers need to
possess at least some fundamental guidelines and translation of the interpretation of tax
statutes, rulings and guidelines and translation of the interpretation into computations of tax
liabilities. Hence, the principal objective of the writing and compiling of this eBook, Malaysian
Taxation 2- Real Property Gains Tax (RPGT) is to present knowledge in Real Property Gains
Taxation, particularly in the context of computing tax liabilities and obligation of taxpayers in
filing returns and tax payments.
This eBook is divided into four subtopic that cover the meaning of RPGT, the chargeability of
RPGT, the treatment of gift and determination of date of disposal and date of acquisition.
This eBook provides explanation in clear and simple language, with illustrative examples and
tables, and some tutorial exercises for those who have no prior knowledge of Income tax and
Real Property Gains Tax. It is the wish of the writers, students as well as lecturers of taxation will
find this eBook is useful for the acquisition of knowledge and for lay taxpayers who must exercise
self-assessment on Income Tax.
The writers would like to take this opportunity to express their sincere gratitude to the people
who have been instrumental in the completion of this eBook and humbly apologize if there are
any shortcoming.

Wan Azilah Wan Yunus
Zuraini Abdul Hadi
Muzirawati Md Mustafa

Commerce Department
Polytechnic Kota Bharu

iii

ABSTRACT

Real Property Gain Tax (RPGT) is a tax impose to gain arising from the disposal of asset. RPGT
is bind under RPGT Act 1976. The knowledge on RPGT would help an individual or company
on tax planning. This eBook is designed to facilitate user to understand on the meaning of real
property and computation of RPGT payable. This eBook divided to four (4) subtopic that cover
the meaning of RPGT, the chargeability of RPGT, the treatment of gift and determination and
date of disposal and date of acquisition. As every subtopic includes explanation integrated
with graphic to make it more interesting. Examples are given in order to facilitate the
understanding of user. At the end of this eBook several tutorial exercises are included for user
to test their understanding on this topic.

iv

ABOUT THE AUTHORS

WAN AZILAH WAN YUNUS started her service as a Diploma in Accounting Lecturer at
Politeknik Sultan Haji Ahmad Shah in 1998 before continuing her
service at Polytechnic Kota Bharu in 2011. She graduated with an
Advanced Diploma in Accountancy from Institute Technology
Mara in 1995. She been teaching Malaysian Taxation paper since
year 2000. She also attended seminar and courses organize by Inland
Revenue Board of Malaysia and private company in order to keep

updated to current changes in Malaysian Taxation.

ZURAINI ABDUL HADI holds a Degree in Accounting from University Kebangsaan
Malaysia in 1999. Then she obtained a Master in Education
(Technical) from University Tun Hussein Onn Malaysia in 2002.
She started her career as an Accounting Lecturer in 2002 until 2019
at Polytechnic Port Dickson and Polytechnic Kota Bharu from 2020
until now. She has 17 years of experience teaching Malaysian
Taxation. Her working experience started in 1999-2000 as an

Account Assistant at Emville Golf Resort, Bangi Selangor.

MUZIRAWATI MD MUSTAFA is the lecturer in Diploma in Accounting at the Commerce
Department, Polytechnic Kota Bharu. Started working in
Polytechnic from 2001 until now. She had experience teaching
Malaysian Taxation course for almost 17 years. During her duty as
a lecturer, she served as an Editor of PKB annual report from 2002
until 2019, Multimedia Coordinator of Commerce Department from
2019 until present and Coordinator of Accountancy Incubator since

2019 until now. She had experiences in accounting, taxation and company secretary work at
Jasa Tax & Accounting Services from 1999-2001. She has registered as an ordinary member
with the Malaysian Insurance Institute in 2018. Obtained a Bachelor of Accounting from
University Utara Malaysia in 1999 and Diploma in Education (Accounting) in 2003 from
Maktab Perguruan Perlis.

v

TABLE OF CONTENTS iii

PREFACE iv
ABSTRACT
ABOUT THE AUTHORS v
TABLE OF CONTENTS
1.0 INTRODUCTION vi
1.1 UNDERSTAND THE MEANING OF RPGT
1.1.1 Definition of RPGT 1
1.1.2 Chargeable Person
1.2 UNDERSTAND THE CHARGEABILITY OF RPGT 1
1.2.1 Real Property Gain Tax Formula 1
1.2.2 Real Property Gain Tax Rate 4
1.2.3 Computation of Disposal Price
1.2.4 Computation of Acquisition Price 5
1.2.5 Chargeable Gain and Allowable Loss 5
1.3 UNDERSTAND THE TREATMENT OF GIFT 6
1.3.1 Treatment of Gift 7
1.3.2 Exemption to Individuals 9
1.4 DATE OF DISPOSAL AND DATE OF ACQUISITION 12
1.4.1 Transaction of No Gain No Loss
1.4.2 Private Residence Exemption 15
TUTORIAL EXERCISE 15
REFERENCES 15

vi 16
17
18

22-31

32

1.0 INTRODUCTION

The Real Property Gains Tax (RPGT) Act 1976 came into force on 7th
November 1975 to replace the repealed land Speculation Act 1974. The RPGT is
the only capital gains tax on disposal of real property situated in Malaysia.

Disposal of chargeable assets from 1 April 2007 to 31 December 2009 was
exempted from RPGT under the Real Property Gains Tax (Exemption)(No 2)Order
2007. It was revoked by the Real Property Gains Tax (Exemption)(No 2)Order 2009-
PU(A)486/2009.

Disposal of chargeable assets from 1 January 2010 would be chargeable to
RPGT, subject to exemptions provided under PU(A) 486/2009 and effective 1
January 2012 revoked by PU(A)434/2011.

1.1 UNDERSTAND THE MEANING OF RPGT
1.1.1 Definition of RPGT
“Real Property” is defined as any land
situated in Malaysia and any interest
option or other right in or over such
land.

1

Section 2 of the Real Property Gains Tax (RPGT) Act 1976 defined land as: -
Surface of the earth and all substances forming
that surface

The earth below the surface and substance therein

Buildings on land and anything attached to land or
permanently fastened to anything attached to land
whether on or below the surface
Standing timber, trees, crops and other vegetation
growing on land

Land covered by water

2

“Option”
includes an
option in a
case where

The grantor binds The grantor binds
himself to sell what he himself to buy what ,
because the option is
does not own and, abandoned he does
because the option is
abandoned never has not acquire

occasion to own

Dispose • Sell,
• Convey,
• Transfer,
• Assign,
• Settle or
• Alienate whether by agreement or by force

of law

Acquire • Purchase,
• grant,
• exchange,
• gift,
• settlement or otherwise.

3

1.1.2 Chargeable Person

Section 6 & schedule 1 of the Real Property Gains Tax Act 1976 provides that
every person, whether resident whether or non-resident in Malaysia, is chargeable in
respect of any chargeable gain that have been made from disposal of chargeable
asset.

“PERSON” Partnership or body or person
Refers to - Co-proprietorship
- Companies
- Incapacitated persons
- Non-resident
Rulers and ruling chief

Hindu Joint Family

Executor
- Trustees
- Acquirer

4

1.2 UNDERSTAND THE CHARGEABILITY OF RPGT

RM RM RM

DISPOSAL PRICE (xx) xxx xxx
Consideration Price (xx)
Less : Para (5)(1)(a) Increasing value of asset (xx) (xx)
----------- ----------
: Para (5)(1)(b) Defending title of asset
: Para (5)(1)(c) Incidental cost

ACQUISITION PRICE xxx xxx (xxx)
Consideration Price (xx) ---------
Add : Incidental cost (xx) (xx)
Less : Para 4(1)(a) Compensation (xx) ---------- xxx
----------- (xxx)
: Para 4(1)(b) Insurance Claim ---------
: Para 4(1)(c) Deposit forfeited xxx
X%
Chargeable Gain/Loss ---------
Less: Exemption (Only for Individual) xxx
======
10% x Gain or 10 000 (whichever is higher)
Gain subject to RPGT
X RPGT Tax Rate

RPGT Payable

5

Summary of RPGT tax formula RM
XX
Disposal Price (XX)
Less : Acquisitions Price XX
Chargeable Gain/Loss (10 000)
(-)exemptions Sec 4 :10% or RM10 000 (higher) XX
Chargeable Gains subject to RPGT X%
RPGT Tax Rate XX
RPGT Payable

Disposal within the following period after Company Malaysian Non-Resident
acquisition and and non-
citizen
Disposal within third year after acquisition 30% Permanent
Disposal in the fourth year after acquisition 20% Residents 30%
Disposal in the fifth year after acquisition 15% 30%
Disposal in the sixth year after acquisition or 5% 30% 30%
there after 20% 10%
15%
5%*

*YA 2022 – tax rate 0%

Example 1 Determination of Tax Rate

Date of acquisition: 12/12/2017
Date of disposal: 06/06/2021
Determine the tax rate for this individual who is Malaysian and permanent resident.

Answer for Example 1 Year
1
12/12/2017 -------------- 11/12/2018 2
12/12/2018 -------------- 11/12/2019 3
12/12/2019 -------------- 11/12/2020 4 (fourth year after acquisition)
12/12/2020 -------------- 06/06/2021
6
The tax rate is 20%.

DISPOSAL PRICE RM
Received from disposal xx

Less: (xx)
Paragraph 5(1)(a) :
Expenses wholly and exclusively incurred in enhancing or preserving (xx)
the value of the assets, such as alterations improvement and
extensions.

Paragraph 5(1)(b) :
Expenses incurred in defending the title to the assets

Paragraph 5(1)(c) : (xx)
Incidental expenses such as fees, commissions, professional fees to XXX
accountants, lawyers, surveyors architect and cost of transfers
(including stamps duties) advertising, costs to find purchasers and
costs of any valuation or market value.

DISPOSAL PRICE

Disposal Price
The disposal price of assets is the consideration received less any of the following expenses:-

1) Expenses wholly and exclusively incurred in enhancing or preserving the value of the
assets such as alterations, improvements, and extensions

7

2) Expenses incurred after acquiring the assets, in respect of preserving or defending
the title to the assets

3) Incidental expenses relating to the disposal of the assets which consists of:-
a) fees, commissions, or remuneration paid for the professional services of any
surveyor, valuer, accountant, agent or legal adviser
b) costs of transfer including stamp duty
c) costs of advertising to find a buyer, and costs reasonably incurred for the
purposes of the RPGT Act in making any valuation or in ascertaining market
value.

Example 2 Disposal Price

Nadzri sell a land on July 2021 for a consideration price of RM375 000 with the following

information:

a) Administration fee during disposal:

Professional fee (lawyer & valuer) RM17 000

Advertising RM 3 000

b) Build fence around the land cost RM25 000

Calculate acquisition price of the land.

Answer for Example 2 RM

Consideration Price 375 000
Less : Para 5(1)(a)
: Fence (25 000)
Para 5(1)(a)
: Incidental: Advertising (3 000)

: Professional fee (17 000)

-----------

Disposal Price 335 000

=======

8

ACQUISITION PRICE RM
Payment for acquisition xx

Plus : Incidental Expenses xx
-Lawyer’s fees, commissions, remuneration for professional services of xx
accountants, surveyors, valuer architects xx
-Expenses of transfers (including stamp duties) xx
- Costs of advertising xxx
- Interest paid on capital employed to acquire the assets
(xx)
Less:
Paragraph 4(1)(a) : (xx)
Compensations or receipts for any damage or injury, destruction,
dissipation, depreciation or risks of depreciation of the chargeable (xx)
assets XXX

Paragraph 4(1)(b) :
Insurance policy receipts for any damage or injury

Paragraph 4(1)(c) :
Deposits forfeited , if any respects of an aborted sale of an assets
ACQUISITION PRICE

9

Acquisition Price
1. The acquisitions price of assets is the considerations paid plus any incidental costs or

expenses that are relevant such as: -

1) Fees, commissions, remunerations paid for professional service, e.g. accountants,
lawyers, surveyor’s architect

2) Costs of transfers e.g. stamp duty
3) Costs of advertising to find sellers.

2. Any revenue expenses that can be claimed under ITA 1967 will not rank for deduction in
arriving at the acquisitions price such as interest on money borrowed to buy the property.
SCH 2, Paragraph 4 also provides that in computing the acquisitions price, the following
receipts must be deducted :-

a. Compensation or similar receipts for any damage, injury or destruction to the
assets

b. Receipts under an insurance policy for any damage, injury to the assets, and
c. Any deposits forfeited in respects of the asset.

3. Incidental Cost consists of:-
1) Fees, commissions, or remuneration paid for the professional services of a surveyor,
valuer, accountant, agent or legal adviser.
2) costs of transfer including stamp duty
3) cost of advertising to find a seller
4) Interests paid on capital employed to acquire the assets is excluded from incidental
cost effective from 1st January 2010.

10

Example 3 Acquisition Price

Aiman Haikal purchased a land in 2020 for a consideration price of RM250 000 with the
following expenses:
a) Administration fees consist of stamping fee of RM2 500 and professional fee (lawyer &

valuer) of RM15 000.
b) Receive RM10 000 deposit from potential buyer and not returnable.
c) Receive RM20 000 from compensation payment from third parties for land damages.

Calculate acquisition price of the land.

Answer for Example 3

RM RM
250 000
Consideration Price
17 500
Add: Incidental Cost: Stamping fee 2 500
30 000
: Professional fee 15 000 -------------
237 500
--------- ========

Less : Para 4(1)(a) : Compensation (20 000)

: Para 4(1)(c) : Deposit forfeited (10 000)

------------

Acquisition Price

Example 4 Computation of RPGT for Individual

Pn Shera bought a house in Kerteh, Terengganu with acquisition price of RM225 000 in June
2016, she decided to sell the house at disposal price of RM310 000. Calculate real property gains
tax payable for Pn Shera.

11

Answer for Example 4 RM
310 000
Pn Shera – YA 2021 (225 000)
Disposal Price ------------
(-) Acquisition Price 85 000

Chargeable gain (10 000)
Less : Exemption (Individual) ------------
75 000
RM10000@10% x 85 000 = 8 500
20%
Chargeable Gain subject to RPGT ------------
X RPGT tax rate (4 years) 15 000
=======
RPGT Payable

Chargeable Gain

Chargeable gains will be arising when the disposal price if the chargeable asset is higher than
the acquisition price. On the other hand, if the disposal price is lower than the acquisition price,
an allowable loss will arise. RPGT is computed on a scale rate depending on the length of
ownership of the chargeable asset. The relief for allowable losses is given as a deduction from
the total tax assessed on the chargeable gains of a taxpayer for the year assessment in which
the lost arise. Any amount of unabsorbed tax relief for losses may be carried forward to future
years. The tax relief for losses is computed at the rate of tax applicable to the category of
disposal giving rise to the loss.

DISPOSAL PRICE > ACQUISITION CHARGEABLE
PRICE GAIN

12

Allowable Loss

With effect from from 1 January 2010 relief is given to an allowable loss by deducting it from the
total chargeable gains for the year of the loss. Any amount that cannot be off-set due to an
insufficiency of chargeable gain can be carried forward and offset in future years till it fully
utilized.

DISPOSAL < ACQUISITION ALLOWABLE
PRICE PRICE LOSS

Example 5 Computation of RPGT Payable for Company and Demonstration of Loss

Budi Bicara Sdn. Bhd disposed of two assets in 2021 and provides you with the relevant data:

Date acquisition Shop Lot A Land
Date of disposal Sept 2018 Dec 2018
Dec 2021 Oct 2021
Purchase price
Deposit by buyer forfeited in 2019 RM RM
Incidental cost: 120,000 300,000
10,000
On acquisition -
On Disposal 24,000
Selling price 6,000 50,000
240,000 10,000
330,000

Compute the RPGT payable indicating the year of assessment by Budi Bicara Sdn. Bhd.

13

Answer for Example 5 Budi Bicara Sdn Bhd Land
RPGT Computation – Y/A 2021
DISPOSAL PRICE
Selling Price (Year ended 2021)
Less : Incidental Cost Shop Lot A

240 000 234 000 330 000 320 000
(6 000) (10 000)
------------ -----------

(-) ACQUISITION PRICE

Purchase price 120 000 300 000
50 000
Add : Incidental cost 24 000
-
Less : Recoveries (10 000) (134 000) -------------- (350 000)
------------- -------------
------------ 100 000 (30 000)

CHARGEABLE GAIN/ALLOWABLE

LOSS

Less : RPGT Allowable loss (30 000)
70 000
Gains subject to RPGT 20%
14 000
X Tax rate (4th year)

RPGT Payable

Note:
i. The allowable loss shall be used to reduce the amount of chargeable gains on other chargeable assets
for the same year
ii. If there any balance it can be carried forward to reduce chargeable gain for the subsequent year until
it fully utilized.

14

iii. Since this question is company therefore it does not qualify for Schedule 4 exemption of RM10 000
or 10% out of Chargeable gain (which ever higher).

1.3 UNDERSTAND THE TREATMENT OF GIFT

The treatments of gifts of assets are covered under Para 12 Schedule 2 RPGTA. According to Para 12,
disposals shall be deemed to be at the market value of the assets except for gifts:

i. between husband and wife,
ii. parent and child or
iii. grandparent and grandchild.

Certain gains on disposal of chargeable assets are exempted from RPGT which are specifically
provided under Schedule 4. The exemptions are: -
a. An amount of RM10 000 or 10% of the chargeable gains, whichever is greater in respect

of a chargeable gain accruing to an individual on the disposal of a chargeable assets which
is not or was not part of a larger chargeable assets at the time of the disposal.
It is provided that chargeable asset disposed by a co-proprietor would qualify for this
exemption

b. A gain accrued in respect of the disposal of a chargeable asset before the date of coming
into force of the RPGT Act

c. A gain accrued to the government, a State Government or a local authority

d. A gain equal to the amount of estate duty payable on the disposal of a chargeable assets
belonging to deceased for the purpose of paying the estate duty. It is provided that the
15

Director General must be satisfied that the disposer is compelled to dispose the asset in
order to pay the estate duty.

1.4 DATE OF DISPOSAL AND DATE OF ACQUISITION

A disposal of an asset shall be deemed to have taken place: -

Where there is an agreement for the disposal of the asset,
on the date of such agreement, or

Where there is no agreement, on the date of completion
of the disposal of the asset.

Date of acquisition of the Date of disposal of that asset
asset by the acquirer by the disposer

16

The date of completion of a disposal means: - Whichever is the earlier

The date on which the ownership of the asset
disposed of is transferred by the disposer,

The date on which the whole of the
amount or value of the consideration in
money or money’s worth for the transfer has

been received by the disposer

The following are the cases where the disposal price of an asset shall be deemed to be equal on
the acquisition price: -

a. the devolution of the assets of a deceased person on his executor or legatee under a will or
intestacy or on the trustees of a trust created under this will.

b. the transfer of assets between spouses or the transfer of assets owned by individual and/or
wife to a company controlled by the transferor and a connected person for a consideration
consisting substantially of shares (at least 75%) and the balance in cash.

c. Transfer to/from nominee/trustee.
d. Transfer by way of security.

17

e. Gift made to the Government, a State Government, a local authority or a charity exempt
from income tax.

f. Disposal of an asset as a result of a compulsory acquisition.
g. Disposal of an asset by a person to an Islamic Bank under a scheme where that person is

financed by such bank in accordance with the Syariah.

Given to individual who is a
citizen or an individual who is
not a citizen but is a
permanent resident in respect
of gain from the disposal by
him of his private residence.

A private residence is defined in paragraph 4 of Schedule 3 as a building or part
of a building in Malaysia

To qualify for the exemption for private residence, the following must be satisfied:-
The individual must elect for such exemption

The election must be in writing and is irrevocable
No further exemption once the election is made, and
No exemption has been elected by that individual under the Land Speculation

Act 1974

18

********Effective year 01-10-2005 exemption on residential property will be given to both
husband and wife, on one residential property each.
********* RPGT exemption order 2020 is given on the chargeable gain on the disposal of a
residential property by an individual who is a Malaysian citizen on or after 1 June 2020 but not later
than 31 December 2021, subject to meeting specified conditions. The exemption is limited to the
disposal of 3 units of residential property for each disposer.

Example 6 Private Residence Exemption

Mr Chew, a Malaysian resident, sold his properties in 2021 due to his migration to Australia:

Acquisition Price Apartment Terrace house Flat
(Cyberjaya) (Cheras) (Subang)

RM220 000 RM200 000 RM125 000

Acquisition Date 1/6/2017 1/5/2015 1/3/2013

Disposal Price RM420 000 RM450 000 RM230 000

Disposal Date 1/11/2021 1/3/2020 15/5/2020

Calculate real property gain tax for Mr Chew for YA 2021 if he claims private residence exemption.

Answer for Example 6

Computation of RPGT payable for Mr Chew for YA 2021

Apartment Terrace house Flat
(Cyberjaya) (Cheras) (Subang)
15/5/2021
Disposal Date 1/11/2021 1/3/2021 1/3/2014
RM230 000
Acquisition Date 1/6/2017 1/5/2015 (RM125 000)
RM115 000
Disposal Price RM420 000 RM450 000
(RM11 500)
Acquisition Price (RM220 000) (RM200 000)

Gain RM200 000 RM250 000

Less : Exemption

RM10 000/ 10% of Gain (RM20 000) (RM25 000)

19

Chargeable gain RM180 000 RM225 000 RM103 500
(X) tax rate 15% 5% 5%

RPGT payable (5th year) (> 6th year) (> 6th year)

RM27 000* RM11 250** RM5 175**

* Private residence exemption under RPGT (Exemption) order 2018 [PU (A) 390/2018]
** Private residence exemption under RPGT (Exemption) order 2020

Example 7 RPGT payable for individual
Encik Amin disposed a land with price of RM780 000 on 1 August 2021. He also spent incidental cost
for broker’s commission cost RM5 000 and RM3 000 for legal fee. He bought the land on 1
September 2016 at RM300 000. During the acquisition, he spent RM5 000 for professional fee and
RM2 000 for stamp duty. He received a compensation of RM50 000 from an estate landowner next
to his land due to the damage of his land.

Calculate real property gain tax payable for Encik Amin for year assessment 2021.

Answer for Example 7 RM RM

Computation of RPGT payable for Encik Amin for YA 2021 780 000 772 000
(5 000) ------------
Disposal Price (3 000)
Consideration price -----------
Less: incidental cost – Brokerage Commission
300 000 (257 000)
- Legal fees 5 000 ------------
2 000
Acquisition Price
Consideration price (50 000)
Add: Incidental price - Professional fee -----------

- Stamp Duty
Less: Compensation on land

20

Chargeable gain 515 000
Less: Exemption (Individual)
(51 500)
RM10 000 @ 10% x RM515 000 = RM51 500 -------------
(Whichever is higher)
463 500
Chargeable gain subject to RPGT 15 %
X tax rate (5 years)
RPGT payable 92 700
========

21

TUTORIAL EXERCISE (5 marks)
(5 marks)
Tutorial 1 (5 marks)
a) Define the land according to RPGT Act,1976. (5 marks)
b) Show the format of disposal price computation. (5 marks)
c) Show the format of acquisition price computation.
d) Define the chargeable gain.
e) Define the allowable loss.

Tutorial 2
a) State FIVE (5) transactions of no gain no loss under Paragraph 3 Schedule 2.

(5 marks)

b) Mr. Hamdan is a Malaysian citizen who is a resident in Malaysia. Mr. Hamdan has sold a

house on 15 February 2021 at a price of RM300,000. Incidental cost incurred for the

disposal are as follow.

Legal fee and stamp duty RM3,000

Advertising to find buyer RM1,000

The house was purchased on 2nd January 2018 with the price of RM210,000. During the

period occupied the house, he has made the following expenses.

Expansion of living room RM50,000
Legal cost to defend the title RM 6,000

22

Cost incurred by the time he bought the bungalow are legal fee RM2,900, stamp duty
RM2,000 and surveyors fee RM1,600. In 2020, he received compensation from developer
for damage of the kitchen RM12,000 and compensation from insurance company
RM10,000.

You are required:
Calculate real property gain tax payable (if any) by Mr. Hamdan for the year of
assessment 2021.

(20 marks)

Tutorial 3
Mr. Ziqri has three houses in Penang. His wife has a house in Jitra. By some reason, they decided
to sell the house on 30 September 2021.
Information regarding the houses are as follows:

Purcahase Date Seberang Seberang Bukit Jitra
Purchase Price Jaya Perai Mertajam
Stamp Duty 2/10/2017 4/7/2019
Home Renovation 1/10/2005 1/11/2013 RM195,000 RM206,000
Compensation received RM96,000 RM123,500
from insurance company 2,500 2,720
The cost of repairing the 960 1,235 36,000 28,500
collapse 00
Forfeited deposit
Sales commission 0 22,000 0 0
Legal Fee (2015)
0 11,000 0 0
0 0 3,300 0
3,960 6,160 4,840
4,400 3,080 8,800 6,600
5,500

23

Sales Price 198,000 184,000 308,000 272,000

Required:
a. Calculate the real property gain tax payable by Mr. Ziqri and his wife for every house,

where the houses are sold on 30 September 2021.

b. Advise Mr. Ziqri and his wife on the exemption can be claimed by them under the real
property gain tax 1976.
(25 marks)

Tutorial 4
a) Ms. Ameeza is the owner of three (3) private residences. Due to financial problem, she sold

one of the houses in 2021. The information relating to the house is as follows:

On 15 March 2021, a house in Taiping was disposed of for RM301,000. Other

expenses incurred in respect of the disposal are as follows:

Legal fee and stamp duty RM9,000

Surveyors cost 3,500

The house was bought on 1st August 2017 with cash consideration of
RM199,500. The relevant information of the house as follows:

Legal fee RM4,900
Stamp duty 2,990
Legal fee for defending the title 4,000
House renovation
Deposit forfeited 14,700
Compensation received on fire insurance 7,400
Compensation received for partial 21,000
damage of house
20,000
24

You are required to: (20 marks)
Compute the real property gains tax payable (if any) by Ms. Ameeza. (5 marks)

b) Define the land under Section 2 RPGT Act 1976.

Tutorial 5
Mr. Fateh owns two houses in Jelebu. His wife, Madam Fatihah owns a house in Port Dickson. They
live in the house in Port Dickson. Both houses which belong to Mr. Fateh are rented out. Due to
change of workplace, they plan to sell the houses on August 2021.

Jelebu Port Dickson

House 1 House 2

Purchase Information 1/9/2016 2/10/2017 3/12/2018
Date of purchase RM100,000 RM130,000 RM200,000
Purchase price 2,000
Stamp Duty 1,000 1,500 5,000
Legal fees 2,000 3,000

Selling Information RM200,000 RM280,000 RM320,000
Selling price 1,000 2,800 3,200
Stamp duty 2,000 5,000 6,000
Legal fee 3,000 4,200 4,800
Commissions

Other information - 8,000 -
Legal fee in defending the
title

25

Compensation received - 16,000 -
from property developer
due to landslide - 6,000 -
Repairing cost due to - - 10,000
Damage
Renovation cost

You are required to:
Compute the real property gain tax payable by Mr. Fateh and Madam Fatihah for each of the
property.

(25 marks)

Tutorial 6
Mr. Muiez is a Malaysian citizen who is a resident in Malaysia for the basis year 2021. In 2017, Mr.
Muiez bought a completed unit of commercial property in Johor Bahru from a developer. On 3rd
January 2017, he paid a deposit of RM50,000 and signed the Sale & Purchase Agreement on that
date. The balance of the purchase price was paid through a bank loan of RM450,000.

Mr. Muiez also incurred the following expenditures in respect of the commercial property:

i. Stamp duty and lawyer’s fee on the sale and purchase agreement RM5,500

ii. Repainting of front office RM1,200

iii. Purchase of furniture and fittings RM10,000

iv. Expansion of office area RM19,000

The commercial property was let out to business operator in that area for RM1,500 per month. In
May 2020, Mr. Muiez received RM23,000 from a property developer as compensation for damages
to his property caused by construction work on a nearby housing area.

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After giving serious thoughts to sell the property, he finally forked out an amount of RM2,000 to
advertise the property in a newspaper. On 20th November 2020, he received a deposit RM7,000
from a potential buyer who eventually call off the deal. Hence, Mr. Muiez forfeited the potential
buyer’s deposit. On 2nd January 2021, Mr. Muiez successfully sold the property (evidenced by the
Sale & Purchased Agreement). As a consideration for disposal of the commercial property, he
received the following payments from the buyer.

15th December 2020 Deposit of RM18,000
2nd January 2021 Partial payment of RM242,000
23rd March 2021 Final payment of RM440,000

Mr. Muiez paid a sum of RM7,500 as the legal cost and stamp duty in relation to the disposal of his
property in Johor Bahru.

You are required to:
Compute the real property gain tax payable, if any, by Mr. Muiez for the year of assessment 2021.

(25 marks)

Tutorial 7
Muhammad is a Malaysian citizen and an owner of two units of bungalows and one unit of shop lot
in Pengkalan Chepa, Kelantan. He disposed of his assets in year 2021. He provides you with the
following information:

Date of acquisition Bungalow 1 Bungalow 2 Shop lot
Date of disposal 1.3.2015 1.3.2016 1.7.2018
Cost of purchase 1.2.2021 1.9.2021 31.3.2021
Renovation RM250,000
Deposits by buyer forfeited in 2017 RM200,000 RM300,000 RM15,000
Rental received RM20,000 -
RM10,000 - -
RM12,000 -
RM3,000
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Received from insurance company RM5,000 - -
Incidental cost:
RM20,000 RM30,000 RM15,000
- On acquisition RM15,000 RM20,000 RM5,000
- On disposal RM360,000 RM450,000 RM250,000
Received from selling the property

You are required to: (20 marks)
a. Compute the RPGT for Muhammad for year of assessment 2021. (5 marks)

b. Compute if these properties are owned by Muhammad Sdn. Bhd.

Tutorial 8
Mr. Lee Ming Ho is a director of a company located in Butterworth, Penang. He is an Korean. In
2015, Mr. Lee Ming Ho bought a completed unit of commercial property in Butterworth from a
developer.

On 3 January 2016, he paid a deposit of RM50,000 and signed the sale & purchase agreement. The
balance of the purchase price was paid through a bank loan of RM450,000. Mr. Lee Ming Ho also
incurred the following expenditures in respect of acquisition the commercial property:

i. Stamp duty and lawyer’s fee on the sale and purchase agreement RM6,500

ii. Repainting of front office RM1,800

iii. Purchase of furniture and fittings RM15,000

iv. Expansion of office area RM22,000

v. Advertise through Instagram RM5,000

The commercial property was let out to business operator in that area for RM1,500 per month. In
May 2017, Mr. Lee Ming Ho received RM23,000 from a house and property developer as
compensation for damages to his property caused by construction work on a nearby housing area.

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Mr. Lee Ming Ho tenure as a director of the company expired on 30 July 2021 and he did not seek
re-appointment due to family matters. In 2 July 2021, he returned to his home town in Korea, in
order to spend more time with his family. After giving serious thoughts to sell the property, he
finally, forked out an amount of RM2,000 to advise the property in a newspaper.

On 20 November 2021, he received a deposit of RM7,000 from a potential buyer who eventually
call off the deal. Hence, Mr. Lee Ming Ho forfeited the potential buyer’s deposit.

On 30 December 2021, Mr. Lee Ming Ho successfully sold the property (evidenced by the sale and
purchase agreement). As a consideration for disposal of the commercial property, he received the
following payments from the buyer:

10 December 2021 Deposit of RM20,000
20 December 2021 Partial payment of RM242,000
30 December 2021 Final payment of RM440,000

Mr. Lee paid a sum of RM18,500 as the legal cost and stamp duty in relation to the disposal o his
property in Butterworth.

You are required to:
a) Determine either Mr. Lee Ming Ho is resident or non-resident for the year of assessment
2021.
(5 marks)
b) Compute the real property gains tax payable, if any, by Mr. Lee Ming Ho for the year of
assessment 2021.
(20 marks)

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Tutorial 9
a) Define ‘person’ who are chargeable under RPGT Act 1976.
(2 marks)
b) List two (2) exemptions for individual and company regarding to the RPGT.
(4 marks)
c) Explain the situation which market price applied for dispose the property.
(4 marks)
d) Bibi & Lola Enterprise ( a partnership ) doing the printing business since 2015. They also
bought one commercial lot at Taman Desa Damai amounted RM480,000 on the 1.11.2018.
They also paid RM10,000 for other expenses and incurred RM50,000 for renovation. Other
expenses incurred was quit rent amounted RM800. RM15,000 was claimed from insurance
company due to the damages of the building. After a few years, they advertised in
newspaper to find a buyer which costed them RM2,000. Finally Mr. Hamdan offered
RM560,000 for the lot. They signed the Sale & Purchase Agreement on 1.9.2021 and also
paid RM10,000 for legal fee and stamp duty regarding to the this disposal.

Based on the information above, compute the RPGT for the partnership if they sell the lot
on 1.9.2021 and 21.11.2021.
What is your advice regarding this situation?

(15 marks)

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The
struggle
you’re in

today
is developing the strength

you need tomorrow…

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REFERENCES

Ahmad Adiebah, Abdul Razak Azizah, MdSalih Noorul ‘Ashikin. (2022). Malaysian Taxation II.
Azimat Advance Ventures

Alan Yeo Miow Cheng. (2018) Malaysian Taxation. 23rd Edition. YSB Management Sdn. Bhd
Choong Kwai Fatt. (2020). Malaysian Taxation Principles and Practice. 27th Edition. Infoworld
Jeyapallan Kasipilai (2019). A Guide to Malaysian Taxation. 5th Edition. Oxford Fajar
Real Property Gains Tax Act 1976
www.hasil.gov.my

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POLITEKNIK KOTA BHARU

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