Q.
Provide a standard format for calculation of RPGT in Malaysia. Illustrate the various parts and workout of the steps.
A.
MIA (Malaysian Institute of Accountants) has published a concise version of Real Property Gain Tax in 2010. Below is an extract of the workout of the calculation in simple straight forward manner.
(Added 22.09.2015)
The format below can be confusing - error on adding Recoveries which should be deducted from consideration paid during an acquisition. So please be aware! Please use a better format by SM Thanneermalai here.
Disposal Price is straight forward:
Consideration paid - Incidental Cost - Enhancement = Disposal Price.
Example, house sold at 530k with agency fee, advertisement and legal fee of 15k, nett is 530 - 15 = RM515k. If RM30k was spent on renovation, it can be deducted from the selling price to reflect a lower disposal price.
515k - 30k = 485k
Acquisition Price is a bit confusing here. Hence using the format from SM Thanneermalai:
Consideration paid + Incidental Cost - Recoveries = Acquisition Price.
Example, house bought at 500k with agency fee, advertisement, legal fee of 15k, and Stamp Duty 9k,
nett is 500 + 15 + 7 = RM522k reflecting higher cost of acquisition.
If there was any recoveries like claiming damage from developer for defects of 40k, deposit forfeited 10k, this 50k (40+10) should be earning and taxable, thus to be deducted to arrive at a cheaper house, ie 522k - 50k = 472k.
Gains = disposal - acquisition = 485 - 472 = RM13,000.
Tax payable (RPGT)
RM13,000 - Sch 4 Exemption 10% or RM10,000 whichever greater (10,000 greater than 1,300)
RM13,000 - RM10,000 = 3,000
Rate of RPGT @ 1 year - 30% in 2014, therefore 3,000 x 30% = RM900.
(End - 22.09.2015)
