1. RPGT (Real Property Gains Tax) – Wait it out!
By now you should know understand a thing or two about RPGT. If not, do a quick google search, and you will find out more about it. The table above will give you some insights into understanding how much will you be taxed if you dispose your property. A hint, it’s got something to do with timing. Generally, anything after 5 years is tax free for Malaysians with a residential property and 5% tax if you’re a company or a non-citizen.
If you’re a citizen or a PR holder, you’re entitled to a further tax relief of RM10,000 or 10% of the chargable gain whichever is a greater accrue to an individual.
2. PASS GO NOW
Did you know as Malaysians, you’re entitled to waive off RPGT at least once in your life? Be sure that the property is in your name, and not joined with your partner. Otherwise you and your partner would waste it on only one property disposal and not two.
3. Furnishing / Renovation
Furnishing or renovating your home can be considered as part of your cost against RPGT, but you have to make sure that the items in the house goes with the sale (what you’re claiming for). So keep those receipts and invoices from your interior designer and contractors. It will contribute to lowering taxes if you’re thinking of selling your property within the 5-year window.
4. GST: Commercial VS Residential
Things have been unclear for those holding on to Commercial properties. According to customs, if a person owns more than two commercial properties or land (more than one acre combined) with a market value of more than RM2mil and has an intention to sell, they are considered to be in business. Thus, a 6% GST fee will be implemented and the owner will need to apply for a GST number.
Does this mean that if I have two properties and I’m on the verge to buying the 3rd, but I am selling off one of my earlier properties means that I am free from GST? Maybe, it’s possible after fulfilling certain criteria.
If you own a residential property, you don’t have to pay GST – there’s RPGT for that.
5. Keep it within the family
Tax can be avoided if any property transfers that happen between immediate family members / spouses ie. Transfer by way of gift between husband and wife, parent and child, or grandparent and grandchild, provided that the donor is a citizen and the gift is made within five years after the date of acquisition by the donor.
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