Foreign individuals selling property in Malaysia pay Real Property Gains Tax (RPGT) at a flat 30% on the net gain if they sell within the first five years. From the sixth year onward, the rate is 10%. There is no 0% tier for foreigners. At the sale, the buyer must hold back 7% of the price (not the 3% for citizens) and pay it to LHDN within 60 days. The seller then files through e-CKHT, and any retention above the actual tax is refunded.
This guide covers RPGT in Malaysia for foreigners: Singaporean, Chinese, Taiwanese, Hong Kong and other non-citizen owners who plan to sell a Johor Bahru condo one day. That includes units at Causewayz Square and other projects near the RTS Link. Our guide to selling a JB condo after completion already covers the general RPGT bands, timing and the selling process. This article focuses on what changes when the seller is a foreigner: the higher retention sum, the reliefs you can and cannot claim, how the holding clock works for off-plan purchases, a fully worked example, and the paperwork that gets your refund back faster. If you plan with RPGT in mind from the day you sign the SPA, it becomes a manageable, predictable cost.
What Are the RPGT Rates for Foreigners in Malaysia?
Non-citizen, non-permanent-resident individuals pay 30% on chargeable gains for disposals in years one to five and 10% from year six onward. The rate never falls to zero, unlike the citizen schedule. The rates come from Schedule 5 of the Real Property Gains Tax Act 1976, and they are the same for any foreign nationality.
| Disposal period (from acquisition date) | Malaysian citizen / PR | Malaysian company | Foreign individual / foreign company |
|---|---|---|---|
| Within 3 years | 30% | 30% | 30% |
| 4th year | 20% | 20% | 30% |
| 5th year | 15% | 15% | 30% |
| 6th year and after | 0% | 10% | 10% |
For a foreign seller, the key date is the fifth anniversary of acquisition. Selling one day before it can mean three times the tax of selling one day after. Most foreign owners who buy for long-term rental or own-stay never pay the 30% band at all, because they hold well past year five anyway.
How the Holding Period Is Counted for Off-Plan Purchases
For RPGT, the acquisition date is generally the date of your written Sale and Purchase Agreement (SPA). It is not the date you receive the keys. This matters a lot for off-plan buyers in JB. The disposal date is likewise generally the date of the SPA you sign with your buyer.
Take a buyer who signs an SPA for an off-plan unit in 2025 and receives vacant possession around 2029 or 2030. A project like Causewayz Square, which is targeting completion around 2030, fits this pattern. By handover, a large part of the holding period may already have passed. The clock runs during construction, so the five-year threshold can arrive only a year or two after completion. Ask your conveyancing lawyer to confirm the exact acquisition date on your file. Their reading of your documents is what counts.
- Direct purchase from the developer: the clock generally starts at the developer SPA date.
- Subsale purchase: the clock starts at the date of your subsale SPA.
- Selling your rights before completion: transferring your SPA rights to another buyer is generally still a disposal for RPGT. The same rate table applies, and the developer’s own transfer conditions also apply.
The 7% Retention Sum: What Foreign Sellers Should Expect
When a non-citizen sells, the buyer (in practice, the buyer’s lawyer) must retain 7% of the total sale price, or the whole cash portion if that is smaller, and remit it to LHDN within 60 days of the disposal. For Malaysian citizens and PRs, the figure is 3%. The 7% rate has applied since 1 January 2018 under section 21B of the RPGT Act.
The retention is a prepayment, not the final tax. LHDN sets it against your actual RPGT. If the tax is lower, the difference comes back to you. If you sold at a loss, the full amount is refundable, though you still have to file. For a foreign seller, the practical effect is cash flow. On a RM1,200,000 sale, RM84,000 is held back at completion, so plan your next purchase or remittance around receiving 93% of the price first.
The Finance Act 2025 introduced some flexibility. Industry summaries note that for disposals from year of assessment 2026, the buyer may remit the seller’s self-assessed tax instead of the standard retention, provided the required statutory notification is in place first. If your expected RPGT is well below 7% of the price, ask your lawyer early whether this route is open to you. It can reduce the amount locked up while you wait for a refund.
Which RPGT Exemptions Can Foreigners Claim?
Foreign individuals keep the main personal exemption: on each disposal, RM10,000 or 10% of the chargeable gain, whichever is greater. Several other reliefs are limited to Malaysian citizens or PRs, so plan without them.
| Relief | Available to foreign individuals? | Notes |
|---|---|---|
| RM10,000 or 10% of gain (whichever higher) | Yes | LHDN lists it for individuals with no citizenship condition. If you sell part of your share, it is pro-rated. |
| Once-in-a-lifetime private residence exemption | No | Limited to Malaysian citizens and permanent residents. |
| No-gain-no-loss gifts between spouses, parents, children, grandparents | Generally no | Requires the donor to be a Malaysian citizen. |
| Inheritance (transfer from a deceased owner’s estate) | Yes, in principle | Transfers from an estate are treated as no-gain-no-loss. Confirm specifics with the estate lawyer. |
| 0% rate after year five | No | The foreign rate floor is 10%. |
One practical point: if a foreign couple wants to move a JB unit between spouses, it is usually cleaner to decide the ownership structure at purchase than to transfer it later. A later transfer can be treated as a taxable disposal.
Worked Example: Foreign Seller, RM1 Million Purchase
This illustration uses round numbers. It is not a quote for any project: for Exsim project SPA prices, WhatsApp us for the latest SPA price list. It applies the rules above to a foreign individual who buys a JB unit at RM1,000,000 in 2026 and sells it for RM1,300,000.
| Item | Amount (RM) | How it is worked out |
|---|---|---|
| Purchase price | 1,000,000 | SPA price |
| Stamp duty on transfer (foreigner) | 80,000 | Flat 8% from 1 Jan 2026 |
| Legal fees on purchase | 11,250 | 1.25% of first RM500k + 1% of next RM500k (scale fees, before SST) |
| Acquisition cost | 1,091,250 | |
| Sale price | 1,300,000 | Your SPA with the buyer |
| Documented disposal costs (assumed) | 8,000 | Legal fees on the sale and other receipted costs |
| Net disposal price | 1,292,000 | |
| Gain | 200,750 | 1,292,000 minus 1,091,250 |
| Less exemption | 20,075 | Higher of RM10,000 or 10% of gain |
| Chargeable gain | 180,675 | |
| RPGT if sold in year 6+ | 18,068 | 10% |
| RPGT if sold in years 1–5 | 54,203 | 30% |
| Retention held by buyer | 91,000 | 7% of RM1,300,000 |
| Refund due (year 6+ sale) | 72,932 | Retention minus tax |
Three things stand out. First, the 8% stamp duty a foreigner pays on the way in raises the acquisition cost, so it reduces the taxable gain on the way out. Keep that receipt. Second, waiting past the fifth anniversary cuts the tax in this example by about RM36,000. Third, the retention is almost five times the year-six tax, so the refund claim is worth managing carefully.
Common Scenarios Foreign Sellers Ask About
Most foreign sellers in JB fit one of a few patterns. Each has a clear RPGT outcome once you know which rule applies.
Selling at a loss or break-even
If the net disposal price is at or below your acquisition cost, there is no chargeable gain and no RPGT. The 7% retention is still held, though, and the return must still be filed within 60 days to get it back. Many foreign sellers forget this step and leave their money with LHDN for longer than needed.
Year five versus year six
If a buyer appears in year five, compare the tax saved by waiting with the value of selling now. In the worked example above, waiting saves about RM36,000. Sometimes a buyer will accept an SPA signed after your anniversary date. Because the disposal date is generally the SPA date, the timing of the signature itself is what matters.
Joint ownership with a Malaysian spouse
When a property is co-owned, each owner’s share of the gain is generally assessed under that owner’s own status. A Malaysian citizen spouse’s share follows the citizen schedule, and the foreign spouse’s share follows the foreign schedule. Each co-owner claims a pro-rated personal exemption. Ask your lawyer how the retention will be handled for a mixed-status sale before you sign.
Selling to another foreign buyer
The RPGT outcome is the same whoever buys. What changes is the buyer’s process: a foreign purchaser in Johor generally needs state consent and must meet the minimum price. Allow extra time in the SPA for that approval.
Allowable Costs: Receipts That Lower Your Tax
Every ringgit of documented, allowable cost reduces your chargeable gain. For foreign owners who may sell years later from overseas, the most valuable habit is to keep a single digital folder for the property from day one.
- Add to acquisition cost: the purchase price, stamp duty on the transfer, legal fees on the purchase, and valuation or professional fees directly linked to buying.
- Add as enhancement: documented spending that improves the asset and is still reflected at sale, such as permanent built-in works. Keep itemised invoices, not just a total.
- Deduct from sale price: legal fees on the sale and other receipted costs of making the disposal.
- Not allowable: mortgage interest, loan-agreement legal fees and loan stamp duty, fees for preparing the RPGT return, and costs already claimed against rental income tax.
Loose furniture and routine repairs claimed against rental income generally do not count as enhancement. If you rent the unit out before selling, keep the two sets of records separate: income-tax expenses and capital improvements.
Filing RPGT from Overseas: Forms, Deadlines and Refunds
Since 1 January 2025, RPGT has worked on self-assessment. The seller calculates the gain and the tax and submits the return electronically through e-CKHT on MyTax. Paper returns are not accepted. Your submitted return is treated as the notice of assessment.
- Get a Malaysian tax reference number if you do not already have one. Rental owners usually do.
- Appoint your conveyancing lawyer or a tax agent to prepare the seller’s return (CKHT 1A). The buyer’s side files CKHT 2A. Check that the RPGT filing is in your lawyer’s scope and fees.
- File within 60 days of the disposal date, which is generally your sale SPA date.
- Pay any tax above the retention within 90 days of disposal. If the retention covers it, the balance is refundable.
- Track the refund. Refunds of excess retention can take several months or longer. Make sure LHDN has your correct bank details and contact address abroad.
Late filing and late payment attract penalties, so a foreign seller who will be outside Malaysia during the sale should sign authorisations in advance. The lawyer can then file on time even if you are travelling.
Practical Planning Tips for Foreign Owners Selling in Johor
Good planning starts at purchase. Most of the tax result is set by your timing, your records and your buyer pool. These steps help foreign owners in JB get the most out of a sale.
- Diarise your fifth anniversary. The drop from 30% to 10% is the biggest lever you control.
- Know your buyer pool. In Johor, foreign purchases generally need state consent and a minimum price, typically RM1 million for most residential property. NST (April 2026) reports that foreign owners of units valued below RM1 million can resell only to Malaysians. Units above the threshold can also be sold to other foreign buyers. Either way, price and present the unit for the buyers who can actually purchase it.
- Bring the money home cleanly. Bank Negara Malaysia allows non-residents to repatriate divestment proceeds and income from Malaysian investments in foreign currency. Keep your SPA, the RPGT filing and the redemption statement ready for your bank.
- Check your home-country rules. Malaysia’s RPGT is only one side. Your own tax authority may also look at the gain, so get a short opinion at home.
- Keep the unit rental-ready. A tenanted or well-presented unit near the RTS can be easier to market. See our JB rental price data near RTS and CIQ and the rental yield guide.
For foreign buyers comparing projects today, a transit-oriented, freehold location is an attractive long-term hold. Causewayz Square is about 800 m from the Bukit Chagar RTS station, which is targeted to start service in February 2027. Compare the options on our project comparison page, or read the step-by-step JB buying process. WhatsApp us for the latest SPA price list and a holding-period timeline for your purchase.
Sources
- LHDN: RPGT exemptions
- StashAway: RPGT Malaysia 2026 rates, exemptions and self-assessment
- DNH Law: Increased tax retention for foreign sellers
- PropCashFlow: RPGT for foreigners in Malaysia 2026
- KPMG Malaysia: Budget 2026 stamp duty
- NST (Apr 2026): Johor foreign property resale rules
- Bank Negara Malaysia: Non-residents investing in Malaysia
This guide is general information, not financial advice.