The 2019 Budget announcements, which were made last year, included the minimum of 5% Real Property Gains Tax (RPGT) for Malaysian and 10% for foreigners and companies.

The Finance Minister, during his announcement, noted that this will exclude the low, low-medium cost and affordable housing priced below RM200,000 and sold after the fifth year of ownership.

On the calculation of property gains tax for units purchased before the year 2000, the Government will use the market price on 1st January 2000 as the initial point of valuation.


One of the ‘shock and awe’ announcements that were made during the Government’s maiden budget announcement was the perpetual imposition of Real Property Gains Tax (RPGT) on disposal of property (with gains) after the 5th year. It could be best described by tax experts as a ‘knock out punch’.

Although the National House Buyers Association (HBA) acknowledges the challenges faced by the government in tabling Budget 2019 and it is overall a commendable budget in view of the financial circumstances, HBA opines that RPGT rate announced was somehow ‘ill-advised’.

HBA is dismayed that genuine owners are now taxed for having ‘diligently preserved’ their properties beyond the grace period of 5 years.

With the Budget announcement, it simply means the Government has proposed to impose an RPGT of 5% for gains on disposal of properties held for more than 5 years by Malaysian citizens and permanent residents.

For non-citizens / permanent residents and companies, the RPGT rate will be increased from 5% to 10%. This reflects badly on the Government as the previous RPGT regime was more equitable and fair where no RPGT was payable beyond the 5th year.

Source: National House Buyers Association Malaysia (HBA)

Properties are always seen as more than just a “roof over your head” but also as a long term financial investment to hedge against inflation and to provide financial security in our golden years.

By charging an RPGT rate for people who have held properties for 6 years or more, the government is effectively imposing “tax on inflation” and this seems to punish genuine long term investors.


Who is affected?

The change affects many Malaysians from all walks of life. After the budget announcement, HBA received several complaints from concerned and disgusted ordinary folks, protesting and voicing their total unhappiness over this new ruling and their regret in voting for the Government.

HBA and some irate long term property owners have written directly to the Finance Minister and we are still awaiting his reply.

This is the first time that the government has imposed RPGT for disposal made after 5 years of the acquisition of Malaysian property owners.

The announcement of such tax was made in Budget 2010 but this proposal was reversed upon appeals by NGOs and the public.


Genuine house buyers normally have to obtain loans to finance their purchases and they hold on to their properties for the long term, some even for decades.

They dispose of or buy property either to upgrade, downsize or as and when the need arises such as funding their children’s education, for medical and retirement expenses. They are certainly not speculators and property ownership is not a business.

The imposition of the 5% tax will greatly affect these groups of Malaysian who hold their properties for the long term. As the time gap between purchase and the sale is great it would be expected that at least on paper it would appear that a substantial gain has been made and arising therefrom the property owners would have to pay a substantial amount of tax.

Why does the government deem it necessary to tax this group of long term individual property owners? What’s the justification for imposing RPGT beyond the 5th year?

Speculators and Foreign Property Owners

Strangely a third group of property owners are not affected at all by the current budget. This group comprises those who enter the property market with the sole intention of making a quick buck by buying and quickly selling. The speculators and flippers.

The government has deemed it necessary to let them ‘off the hook’ and not change the rate of tax imposed. Why is the rate of real property gains imposed on short term property owners not revised upwards?

Generally, foreigners come in with their cache of funds to snap up properties driving up prices until they are beyond the reach of the average rakyat and sell them when the price goes up.


Recently it has been reported that a Hong Kong actor has bought several properties in Malaysia and he is just waiting to sell when the price increases.

Why has the Government deemed it not necessary to increase the rate of tax paid by the foreign property owner(s)? The Government must not relent at the expense of the average long term individual Malaysian property owner.



Sale of Properties below RM200,000

The Government has announced that out of their concern for the rakyat, gains made from the sale of properties below RM200,000 is exempted from tax.

Honestly, not many will benefit from it as average prices are higher, especially in Kuala Lumpur. So this exemption is meaningless to the majority of property owners.

Furthermore, the government should consider that this may be encouraging the speculators to buy cheap properties to avoid having to pay RPGT and causing the prices to rise and burden the lower income group.

This article is contributed by the National House Buyers Association of Malaysia.

National House Buyers Association of Malaysia (HBA) is a voluntary non-governmental, non-profit and non-political organisation. The organisation’s working committee consists of volunteers from various professions working around sheer humanitarian principles and ethics striving wholly for a balanced, fair and equitable treatment for house buyers in their dealings with housing developers.

The Association’s Pro Tem Committee came into existence on 16th October 1999 comprising a group of aggrieved house buyers who had discovered to their disappointment that getting their woes heard was a frustrating process.

On 26th July 2000, the Association was registered by the Registry of Societies and then formally launched as the House Buyers Association (Kuala Lumpur & Selangor) on 20th April 2001 by YB Dato’ Seri Ong Ka Ting, the Minister of Housing and Local Government back then.

(9 July 2019)

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