Real Property Gains Tax (RPGT) Act 1976
The Real Property Gains Tax Act 1976 is the principal legislation governing the imposition, assessment, and collection of tax on gains arising from the disposal of real property in Malaysia, together with matters incidental thereto.
Where a disposal results in a chargeable gain, the disposer is liable to pay Real Property Gains Tax (RPGT). The applicable tax rate depends on several factors, including:
Please refer to the table below for the current RPGT rates:
Right to Appeal
Section 18 of the Real Property Gains Tax Act 1976 provides that:
“ A person aggrieved by an assessment made on him may appeal to the Special Commissioners against the assessment in the same manner as an appeal against an assessment of income tax made under the Income Tax Act 1967……….”.
If you believe that an RPGT assessment issued by the Inland Revenue Board (IRBM) is incorrect or excessive, you are entitled to appeal to the Special Commissioners of Income Tax by following the prescribed procedures applicable to income tax appeals.
Example
If IRBM assesses your chargeable gain based on an incorrect market value or acquisition price, you may lodge an appeal for the assessment to be reviewed.
Revision Due to Error or Mistake
Section 19 of the Real Property Gains Tax Act 1976 provides that:
“A person upon whom a notice of assessment is served may within five years after the end of the year of assessment in which the assessment was made apply in writing to the Director General for a revision of the assessment on the ground that the assessment is excessive by reason of an error or mistake in a return or other statement made by that person for the purposes of the assessment…”
If an RPGT assessment is excessive due to a computational error or an incorrect statement made in the RPGT return, the taxpayer may apply in writing to the Director General of Inland Revenue for a revision of the assessment.
Such an application must generally be made within five years after the end of the relevant year of assessment.
Example
If you subsequently discover that an allowable acquisition expense or enhancement expenditure was omitted from your RPGT computation, resulting in a higher tax assessment, you may apply for a revision under Section 19.
Once-in-a-Lifetime RPGT Exemption for a Private Residence
RPGT Act 1976 Schedule 3, Paragraph 9 provides that
“An individual is entitled to the exemption under section 8 in respect of the disposal of one private residence only: Provided that – (a) he elects that such exemption shall apply to that private residence; (b) on such election being made, there shall be no further exemption in respect of the disposal of any of his other private residences.”
Once this exemption is elected for a particular property, it cannot be claimed again for the disposal of any other private residence.
Accordingly, if you own multiple residential properties and intend to dispose of more than one property during your lifetime, careful tax planning should be undertaken. In most cases, it would be more beneficial to elect the exemption for the property that is expected to generate the highest chargeable gain.
Acquisition Price for Properties Acquired Before 1 January 2013
The acquisition price of a property is generally the consideration paid to acquire the property together with allowable incidental acquisition costs.
However, special rules apply to properties acquired before 1 January 2013.
“Paragraph 2A(1) – For the purposes of this Schedule, where a disposal of chargeable assets is subject to tax under Part I of Schedule 5, references to 1 January 1970 shall be construed as references to 1 January 2013.”
Accordingly, where a property was acquired before 1 January 2013 and is subsequently disposed of on or after that date, the acquisition price for RPGT purposes is generally taken to be the market value of the property as at 1 January 2013, instead of the original purchase price.
Example
A property was purchased in 1996 for RM180,000 and is sold in 2026.
For RPGT purposes, the acquisition price is generally not the RM180,000 originally paid. Instead, the acquisition price is the market value of the property as at 1 January 2013, as determined by a registered valuer, say RM500,000/-.
This legislative amendment was introduced to provide a fairer tax treatment for long-held properties by recognising the substantial appreciation in property values over time.
Functions of Registered Valuers in RPGT Matters
Registered valuers play a significant role in RPGT matters whenever the market value of a property is required for tax computation, particularly where a retrospective valuation is necessary.
The valuation prepared by a registered valuer provides an independent and professional opinion of market value, which supports the computation of the acquisition price, disposal price, or substituted market value for RPGT purposes.
Determining Acquisition Price Where No Purchase Consideration Exists
In certain circumstances, no acquisition price is available because the property was acquired without monetary consideration.
Common examples include:
Property received as a gift from parents or other family members;
Property inherited from a deceased person’s estate;
Property transferred pursuant to certain family arrangements.
In these situations, a registered valuer is engaged to determine the appropriate market value as required under the RPGT Act.
(refer to https://www.agilitymy.com/insight-en/valuation-report-is-required-when-you-are-disposing-a-property-inherited-from-deceased-person/)
Retrospective Valuation
Many RPGT cases require the market value of a property as at a historical date rather than its current market value.
Examples include:
Determining the market value as at 1 January 2013 for properties acquired before that date;
Determining the market value at the date of inheritance;
Determining the market value at the date of a gift or transfer.
Retrospective valuation requires careful analysis of historical market evidence and comparable transactions that existed on the relevant valuation date.
(refer to https://www.agilitymy.com/insight-en/retrospective-valuation/).
Determination of Disposal Price
In certain transactions, the disposal price for RPGT purposes is required to be substituted by the property’s market value.
Examples include transfers between related parties or transactions where the consideration does not reflect market value.
In such cases, the registered valuer determines the market value of the property as at the date of disposal.
Preparation of Written Valuation Reports
RPGT Act 1976, Section 13 provides that where market value is to be taken for the purposes of the Act, a written valuation by a registered valuer must be submitted together with the RPGT return.
The valuation report provides professional evidence supporting the market value adopted in the RPGT computation.
Expert Witness in RPGT Disputes
Where a dispute arises between the taxpayer and the Inland Revenue Board regarding the market value adopted for RPGT purposes, a registered valuer may act as an expert witness.
The valuation report and expert opinion may be relied upon during:
objections;
appeals before the Special Commissioners of Income Tax; or
court proceedings.
Assisting Tax Professionals and Solicitors
Registered valuers work together with accountants, tax agents, solicitors, and estate administrators by providing independent market value opinions required for accurate RPGT computations.
Their valuation reports assist in ensuring compliance with the RPGT Act while reducing the risk of disputes with the Inland Revenue Board.
Please feel free to contact Agility Valuers & Property Consultants should you require any further clarification or assistance regarding RPGT valuation matters.
Frequently Asked Questions
When is a valuation report required for RPGT purposes?
A valuation report is required whenever the market value of a property needs to be adopted for the computation of Real Property Gains Tax (RPGT). Common situations include inherited properties, properties received as gifts, transfers between related parties, retrospective valuations (such as determining the market value as at 1 January 2013), and transactions where the disposal consideration does not reflect the property’s market value. A valuation report prepared by a registered valuer provides independent evidence to support the market value adopted for RPGT purposes.
Why do I need a retrospective valuation for RPGT?
A retrospective valuation determines the market value of a property as at a past date rather than its current value. This is commonly required for properties acquired before 1 January 2013, inherited properties, or properties received by way of gift. The registered valuer analyses historical market evidence and comparable sales available on the relevant valuation date to determine the property’s market value.
If I purchased my property before 1 January 2013, can I use my original purchase price as the acquisition price?
Not necessarily. For properties acquired before 1 January 2013 and disposed of on or after that date, the acquisition price for RPGT purposes may be the property’s market value as at 1 January 2013, instead of the original purchase price, subject to the provisions of the Real Property Gains Tax Act 1976. A registered valuer can determine this historical market value through a retrospective valuation.
Can I appeal if I disagree with the RPGT assessment issued by the Inland Revenu?
Yes. If you believe the RPGT assessment is incorrect or excessive, you may appeal to the Special Commissioners of Income Tax under Section 18 of the Real Property Gains Tax Act 1976. Alternatively, if the excessive assessment is due to an error or mistake in your RPGT return, you may apply to the Director General of Inland Revenue for a revision under Section 19, generally within five years after the end of the relevant year of assessment.
What are the benefits of engaging a registered valuer for RPGT matters?
A registered valuer provides an independent and professionally supported opinion of market value, helping to ensure accurate RPGT computations and compliance with the Real Property Gains Tax Act 1976. Their services include retrospective valuations, determination of acquisition and disposal values, preparation of valuation reports, and expert witness testimony in RPGT disputes. A professionally prepared valuation report can also reduce the likelihood of disputes with the Inland Revenue and provide stronger support during tax audits or appeals.
———————————————————————————————————————————————————————
This blog / insight is based on Agility Valuers & Property Consultants / Agility Research (AVPC)’s current understanding and insights about the related topic in the current property / real estate market context. Agility Valuers & Property Consultants / Agility Research (AVPC) makes no guarantees, representation or warranties of any kind, expressed or implied, regarding the information including but not limited to, warranties of content, accuracy and reliability. Interested parties should undertake their own inquiries as to the accuracy of the information. Agility Valuers & Property Consultants Sdn. Bhd. / Agility Research (AVPC) excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss or damages arising therefrom.
Neither the whole nor any part of our blog or insights may be included in any published document, circular, prospectus or statement, nor published in any way without the prior written approval of Agility Valuers & Property Consultants Sdn. Bhd. / Agility Research (AVPC). We shall not be obligated to update this blog / insight in response to changes in market conditions or the regulatory environment subsequently.
For more information, please contact:
Sr Yap Kian Ann
Tel: 603-9544 2694 Email: yap@agilitymy.com
HP : 6012-378 5811 Website: www.agilitymy.com
All Rights Reserved
Copyright © 2026 Agility Research
