When is RPGT applicable?

Category: Tax Advisory

Last updated on April 7, 2019

RPGT is not applicable if the disposal price of a property is deemed equal to or lower than the acquisition price. It is only chargeable if there is a profit gain from the disposal of the real property.

  • Individuals (Citizens, PRs, Non-Citizens & Foreigners)

    • If any of the above parties sell their property at a profit, they will have to pay RPGT based on their chargeable gain.

  • Companies

    • Usually, the selling of shares by companies are not subject to RPGT except Real Property Companies (RPCs) whose core business is in real property. An RPC company constitutes only if it has real property[1] or RPC shares amounting to no less than 75% of their company’s total tangible assets. However, if the company disposes of its shares or real property to the point where its RPC share percentage falls below 75% and it ceases to be an RPC, then the shares that are disposed of will not retain its RPC characteristic and will be liable for the RPGT provision.

Additionally, if a company reclassifies its real property from fixed asset to current asset (say, trading stocks) then it is also deemed as a disposal of a chargeable asset and is subject to RPGT. The disposal price of such assets will be at their market value at the date of reclassification.

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