Malaysia exempts payment of real property gains tax under certain circumstances

28 August 2020

In conjunction with the Malaysian Government’s recent unveiling of the National Economic Recovery Plan in response to the Covid-19 pandemic, the Real Property Gains Tax (Exemption) Order 2020 (“Exemption Order”) was gazetted on 28 July 2020 and came into force retrospectively on 1 June 2020, with the aim of stimulating the property market.

Under the Exemption Order, an individual is exempted from paying real property gains tax on the chargeable gain accruing on the disposal of up to three units of residential properties if certain conditions are fulfilled, including that the individual is a Malaysian citizen who is the sole or joint owner of the property being disposed and the sale and purchase agreement for the disposal of property is executed on or after 1 June 2020 but not later than 31 December 2021 and is duly stamped not later than 31 January 2022.