Individual taxpayer sold Property for RM3 million get taxed even though applied for RPGT Exemption

In 2020, our Client purchased a property located in Shah Alam (the “Property”) from a developer. Just four years later, in 2024, she sold the Property to a new buyer.

Under Schedule 5 of the Real Property Gains Tax Act 1976 (“RPGTA”), properties sold within five years of acquisition are subject to Real Property Gains Tax (“RPGT”), with the applicable tax rate depending on how soon after purchase the property is sold.

However, there is a crucial exemption: Section 8 and Schedule 3 of the RPGTA allow Malaysian citizens or permanent residents selling properties that have been used for residential purposes to secure a RPGT waiver.

On 5 September 2024, our Client received a tax assessment from the Inland Revenue Board (IRB) imposing an RPGT liability of RM170,280.00. Displeased with this assessment, our Client sought to appeal the decision, invoking the residential property exemption under paragraph 9, Schedule 3 of the RPGTA.

We immediately took action by filing a Form Q to contest the tax assessment, coupled with strategic negotiations and direct correspondence with the IRB officer in charge.

On 1 October 2024, we successfully secured a complete tax exemption for our Client.

Conclusion

Not only did we successfully overturn the RM170,280 tax liability, but our swift and decisive action ensured that the entire process was resolved in record time—saving our Client from both financial and legal complications. This case exemplifies the importance of specialized tax knowledge and proactive legal strategy in achieving the best possible outcome for property owners.