The Lembaga Hasil Dalam Negeri Malaysia (LHDN) has introduced a significant update to the Real Property Gains Tax (RPGT), also known as Cukai Keuntungan Harta Tanah (CKHT), through its Operational Guidelines No. 2 of 2026.
Effective from January 1, 2025, Malaysia transitions to a Self-Assessment System (STS) for RPGT—marking a major shift in how property gains tax is reported, assessed, and paid.
What is RPGT?
Real Property Gains Tax (RPGT) is a tax imposed on gains arising from the disposal of real property or shares in real property companies in Malaysia. It applies to individuals, companies, and other entities.
Key Change: Introduction of Self-Assessment System (STS)
Under the new STS framework:
The seller’s CKHT return form (CKHT 1A / CKHT 1B) is now automatically treated as a deemed tax assessment
This eliminates the need for LHDN to issue a formal notice of assessment
Taxpayers are now fully responsible for accurate reporting and timely payment
This change aligns RPGT with other tax systems in Malaysia, improving efficiency and compliance.
Responsibilities of the Seller (Disposer)
Property sellers now carry greater responsibility under the new rules:
Responsibilities of the Buyer (Acquirer)
Buyers also play a crucial role in ensuring tax compliance:
New Update (Effective January 1, 2026)
A key enhancement introduced in 2026:
Buyers may opt to withhold based on the seller’s “deemed assessment” amount
This applies if the seller provides the calculated tax payable
It replaces the standard 3% / 5% / 7% withholding rate
This allows for more accurate tax collection and reduces the risk of under- or over-withholding.
Important Deadlines to Remember
| Obligation | Deadline |
|---|---|
| Filing CKHT Forms | Within 60 days |
| Buyer’s Withholding Payment | Within 60 days |
| Seller’s Tax Payment | Within 60 days |
Penalties for Non-Compliance
Failure to comply with RPGT obligations can result in significant penalties:
Late Payment Penalty: 10% increase on unpaid tax
Failure to File: Up to 3 times the tax amount
Legal Action: Possible prosecution for serious non-compliance
Why This Matters
The shift to a self-assessment system means:
Greater accountability for taxpayers
Faster processing by LHDN
Increased importance of accurate tax computation and timely submission
For both buyers and sellers, understanding these obligations is essential to avoid penalties and ensure smooth property transactions.
Final Thoughts
LHDN’s RPGT Operational Guidelines No. 2 of 2026 represents a major step toward modernizing Malaysia’s tax administration. With mandatory e-filing, strict deadlines, and clearer responsibilities, the system is designed to be more efficient—but also less forgiving of errors.
If you are planning to buy or sell property, it is highly advisable to work with a qualified tax professional to ensure full compliance under the new rules.
Reach out to us if you need further information and assistance on RPGT.