(Tax Update) 2025 RPGT Changes

2025 RPGT Changes

Last week's phone call made me chuckle. A client called asking if loan interest was deductible for Real Property Gains Tax (RPGT).

When I asked what his lawyer said, his hearty laugh told me everything.

It's a familiar scene in Malaysia – property matters go to lawyers, tax matters go to tax agents, but sometimes the lines blur in confusing ways.

Truth is, as a licensed tax agent, I've handled fewer RPGT cases than you might expect. Really. No joke.

Most Malaysians automatically turn to their lawyers for property transactions, assuming they'll handle everything, including the tax implications.

It's an interesting dynamic – lawyers are trusted implicitly with property matters, while tax agents are expected to know everything about taxes, including RPGT.

What really catches people off guard is when I mention that some property disposals might actually be subject to income tax rather than RPGT.

That's usually when I get the wide-eyed stare followed by, "But my lawyer never mentioned that!"

Well, that's because tax implications can be more complex than they appear.

But here's where it gets interesting on RPGT ....

Starting January 1, 2025, Malaysia has completely revamped its RPGT system. Gone are the days of paper submissions and relying solely on professionals.

The new self-assessment system puts the responsibility squarely on taxpayers' shoulders. Think of it as DIY tax returns, but for property gains.

The changes are significant. Every property seller now needs to calculate their own tax liability and submit returns through the e-CKHT platform on MyTax.

No more paper shuffling – everything's gone digital.

You've got 90 days to pay up after disposal, instead of the previous 60 days, but don't let that extra month make you complacent.

The new system also brings some interesting twists. Each property disposal is now treated separately, and losses can only offset gains within the same year.

And if you need to make corrections? You get one shot at amending your return within six months.

For property owners, this means one thing: you can't just delegate everything to your lawyer anymore. The new system demands more involvement and understanding from taxpayers.

While lawyers remain crucial for property transactions, having a tax agent in your corner might save you from some unpleasant surprises down the road.

Remember, when it comes to property transactions in Malaysia, it's not just about the legal paperwork anymore – it's about understanding the tax implications too.

PS : Authored by Mr Koh Teck Peng in his personal LinkedIn post https://bit.ly/3EiGhs4