RPGT 2026 Malaysia for Factory & Industrial Property: Rates, Retention Sum & Exemptions

Key Takeaways

• Malaysian citizens and permanent residents pay RPGT of 30% on a factory sold within three years, 20% in the fourth year, 15% in the fifth year and 0% from the sixth year.
• Malaysian companies pay the same 30%, 20% and 15%, but 10% from the sixth year onward. Foreign individuals and foreign companies pay 30% for the first five years and 10% after that.
• The buyer must hold back part of the price and remit it to LHDN within 60 days: 3% for individual citizens and PRs, 5% for a Malaysian company selling within three years (3% after), and 7% for foreign sellers.
• RPGT has been self-assessed since 1 January 2025. The seller files Form CKHT 1A on e-CKHT (MyTax) within 60 days of the SPA date and pays any balance within 90 days.
• Individuals deduct RM10,000 or 10% of the gain, whichever is greater. The once-in-a-lifetime private residence exemption does not apply to a factory.

RPGT on a factory or industrial property in Malaysia in 2026 depends on who sells and how long they held it. Individuals who are Malaysian citizens or permanent residents pay 30% within three years, 20% in year four, 15% in year five and nothing from year six; Malaysian companies pay the same except 10% from year six; foreigners and foreign companies pay 30% for five years, then 10%. These rates, published by LHDN, have not changed since 1 January 2022.

The rules are national. A factory in Port Klang, Shah Alam or Seremban is taxed the same way. Below: the rate tables, the retention sum, how the gain is calculated, worked examples on a factory sale, exemptions, and whether to hold industrial property personally or through a company.

RPGT Rates 2026 for Factory and Industrial Property

The Real Property Gains Tax Act 1976 sorts sellers into three groups in its Schedule 5. Factories, warehouses and industrial land follow the same rates as any other real property.

Holding period (from acquisition date)	Part I: individual citizens and PRs	Part II: Malaysian companies, trustees, registered bodies	Part III: non-citizens (non-PR), foreign companies
Within 3 years	30%	30%	30%
In the 4th year	20%	20%	30%
In the 5th year	15%	15%	30%
6th year and after	0%	10%	10%

Source: LHDN, Real Property Gains Tax rates. Part I also covers partnerships. The 0% for Part I in the sixth year onward applies to disposals from 1 January 2022.

How the holding period is counted

Both dates come from the sale agreement. Under LHDN's rules, the disposal date is the date of the written agreement (the SPA), not the date the title is transferred or the balance is paid. Your acquisition date is the date of the SPA under which you bought. So if you signed to buy on 1 March 2021, an SPA to sell signed on or after 1 March 2026 falls in the sixth year. Signing a week too early can cost a Malaysian individual 15% of the gain.

The RPGT Retention Sum: 3%, 5% or 7%

Whatever the seller's final tax bill, the buyer must retain part of the price and pay it to LHDN within 60 days of the disposal date. The retention rate depends on the seller:

Seller	Retention by the buyer
Part I (individual citizens and PRs)	3% of the price
Part II (Malaysian company), sold within 3 years	5%
Part II, sold from the 4th year	3%
Part III (foreign individuals and foreign companies)	7%

The buyer retains this percentage of the total price, or all of the cash consideration if that is lower. The money is credited against the seller's RPGT. If the retention is more than the tax, the seller claims the excess back; if it is less, the seller pays the balance.

From disposals in 2026 there is a new option: if the seller tells the buyer the self-assessed tax before the remittance is made, the buyer may retain and remit that amount instead, if it is lower. A buyer who fails to remit on time is charged an extra 10% of the unpaid amount, which is why the SPA and the lawyers' stakeholder arrangements always deal with it.

How RPGT on a Factory Sale Is Calculated

RPGT is charged on the chargeable gain: the disposal price minus the acquisition price, as LHDN defines them.

Step	What goes in
Disposal price	Sale price minus enhancement costs reflected at the time of sale (for example, an approved extension or warehouse enlargement), costs of defending title, and incidental costs of sale (agent, legal, valuer, surveyor fees)
Acquisition price	Purchase price plus incidental costs of purchase (professional fees), minus any insurance or compensation received for damage and forfeited deposits
Chargeable gain	Disposal price minus acquisition price
Individuals only	Deduct RM10,000 or 10% of the gain, whichever is greater
Tax	Chargeable gain x the rate for your category and holding period

Two costs owners often try to claim, and cannot: interest on the loan used to buy the factory, and any expense already deducted for income tax (repairs, for example). Keep invoices for enhancement works and the approved plans for them; LHDN can ask for proof for seven years.

Worked Example: RPGT on a RM4.2 Million Factory Sale

A factory was bought under an SPA dated 1 March 2023 for RM3,000,000, with RM45,000 of legal and valuation fees. The owner added an approved extension costing RM200,000. It is sold under an SPA dated 1 October 2026 for RM4,200,000, with RM110,000 of agent and legal fees. That is in the fourth year of ownership.

Line	Amount
Sale price	RM4,200,000
Less incidental costs of sale	(RM110,000)
Less enhancement (approved extension)	(RM200,000)
Disposal price	RM3,890,000
Purchase price plus incidental costs	RM3,045,000
Gain	RM845,000

Seller	Exemption	Chargeable gain	Rate (4th year)	RPGT	Buyer's retention
Malaysian individual	RM84,500 (10%)	RM760,500	20%	RM152,100	RM126,000 (3%)
Malaysian Sdn Bhd	None	RM845,000	20%	RM169,000	RM126,000 (3%)
Foreign individual	RM84,500 (10%)	RM760,500	30%	RM228,150	RM294,000 (7%)

The same gain realised in the sixth year or later changes the picture:

Seller	Rate (6th year+)	RPGT
Malaysian individual	0%	RM0
Malaysian Sdn Bhd	10%	RM84,500
Foreign individual	10%	RM76,050

For the company, waiting two more years halves the tax. For the individual, it removes it. If you are planning a sale, check the SPA date of your purchase before you agree a timeline with a buyer, and get a realistic price first: our guide on how much a factory is worth explains how valuers price industrial property, and JPPH-recorded transactions in Selangor show what comparable factories actually sold for.

RPGT Exemptions That Matter to Factory Owners

Exemption or relief	Who gets it	Applies to a factory?
RM10,000 or 10% of the gain, whichever is greater	Individuals only	Yes
0% from the sixth year	Part I disposers (citizens, PRs, partnerships)	Yes
Once-in-a-lifetime private residence exemption	Citizens and PRs	No, residential only
Gift between spouses, parent and child, grandparent and grandchild	Malaysian citizen donors	Yes, treated as no gain, no loss
Transfer to your own Malaysian company for shares	Malaysian citizen owners, company controlled by you or your spouse, at least 75% paid in shares	Yes, treated as no gain, no loss
Compulsory acquisition by the government	Any owner	Yes, treated as no gain, no loss

Sources: LHDN exemptions and transactions treated as no gain, no loss.

A loss on a disposal can be set off against gains on later disposals and carried forward for up to nine years of assessment. If the seller trades property as a business, the profit is taxed as income under the Income Tax Act instead of RPGT.

Filing and Paying RPGT: Deadlines Since 2025

RPGT moved to self-assessment for disposals from 1 January 2025, introduced by the Finance Act (No. 2) 2023. No assessment notice is issued: the return you file is the assessment.

Who	What	Deadline
Seller	File Form CKHT 1A on e-CKHT (MyTax); CKHT 3 if claiming an exemption or reporting a loss	60 days from the disposal date
Buyer	File Form CKHT 2A and remit the retention sum	60 days from the disposal date
Seller	Pay the RPGT, or the balance after the retention	90 days from the disposal date
Both	Keep the SPA, invoices and computations	7 years

Paper forms are no longer accepted. The penalties are heavy: failing to file or declare can cost up to three times the tax, and an incorrect return up to 100% of the tax under-declared.

Seller's RPGT checklist

• Find the SPA date of your purchase and count the holding period to the planned SPA date
• Collect purchase legal and valuation invoices, and invoices plus approved plans for any extension
• Work out the gain and the tax before you agree the price
• Agree in the SPA how the retention sum is handled
• File CKHT 1A (or CKHT 3) within 60 days and pay any balance within 90 days

Company or Individual: Who Should Own the Factory?

There is no single answer, but the RPGT difference is large and worth knowing before you buy.

• Exit tax. An individual citizen who holds for more than five years pays 0% RPGT. A Malaysian company pays 10% of the gain however long it holds. On a RM2 million gain that is RM200,000.
• Financing. A company's factory loan is priced off the bank's Base Rate, BLR or cost of funds; an individual's off SBR. Our factory loan guide compares them.
• Selling the company instead of the factory. Shares in a real property company (a controlled company whose real property is at least 75% of its tangible assets) are taxed like property. Since 1 January 2024, RPC shares sold by a company fall under capital gains tax in the Income Tax Act instead of RPGT, while individuals selling RPC shares remain under RPGT.
• Moving a factory you own into your company. A Malaysian citizen can transfer the property to a Malaysian company he or his spouse controls, for at least 75% in shares, on a no gain, no loss basis for RPGT. Stamp duty on that transfer is a separate question; see our stamp duty guide for factory buyers.
• Income tax and allowances. A company that uses the building in its business may claim capital allowances, which can be adjusted when the building is sold. Our guide to capital allowances on a factory covers the basics; get your tax adviser to model both structures.

Foreign buyers also face state consent and, in Selangor, a RM3 million minimum price for industrial buildings; the foreign company guide covers the approvals.

FAQ

What is the RPGT rate for a factory in 2026?

For Malaysian citizens and PRs: 30% within three years, 20% in the fourth year, 15% in the fifth and 0% from the sixth. Malaysian companies pay the same except 10% from the sixth year. Foreign individuals and companies pay 30% for five years and 10% after.

Is there RPGT after 5 years on a factory?

Not for individual Malaysian citizens and permanent residents, who pay 0% from the sixth year. Companies and foreigners still pay 10% from the sixth year onward, with no further reduction.

What is the RPGT rate for a company in Malaysia?

A company incorporated in Malaysia pays 30% within three years, 20% in the fourth year, 15% in the fifth year and 10% from the sixth year. A company incorporated outside Malaysia pays 30% for the first five years and 10% after.

How much must the buyer retain for RPGT?

3% of the price if the seller is an individual citizen or PR, 5% if a Malaysian company sells within three years (3% after that) and 7% if the seller is a foreigner or foreign company. The buyer remits it to LHDN within 60 days of the SPA date.

When is the RPGT holding period counted from?

From the date of the SPA under which you bought to the date of the SPA under which you sell. The transfer of title and the payment dates do not change it.

Can I deduct renovation and legal fees from the gain?

Yes for enhancement works reflected in the property at sale, such as an approved extension, and for professional fees on the purchase and sale. Loan interest and expenses already deducted for income tax cannot be deducted.

How do I file RPGT for a factory sale?

File Form CKHT 1A on e-CKHT in MyTax within 60 days of the disposal date and pay any balance within 90 days. Paper forms are no longer accepted for disposals since 1 January 2025.

Should I buy a factory personally or through a company?

Individuals pay 0% RPGT after five years while companies pay 10%, but loan pricing, rental income tax, capital allowances and how you plan to exit all matter. Model both with your accountant before you sign the SPA.

Planning a sale? See how we market industrial property on the sell your factory page, or compare live stock such as factories for sale in Shah Alam and factories for sale in Port Klang. Owners who want one agent to run the whole sale can read about our exclusive agent service.

Buying or renting, talk to us

FactoryHub is the industrial-only platform of Peter Tan (REN 12771) and Jason Low (PEA 1478), registered with BOVAEP under CID Realtors Sdn Bhd E(1) 1855. We handle both rent and sale, and we co-broke across the whole market, so if the right unit is another agent's listing we will still put it in front of you.

Send us the numbers that decide the shortlist: required amps, built-up area, floor loading, preferred area and target date. We reply with what actually exists, including units that are not advertised publicly. For 800A to 4,000A+ requirements, see high-power factories in Selangor.

Agent	Licence	Mobile / WhatsApp	WeChat
Peter Tan	REN 12771	+6016-666 6872	peterindustrial
Jason Low	PEA 1478	+6012-288 1834	massiveaction

Factories and Warehouses in Port Klang

Live listings with power, ceiling height and floor loading for every unit:

• Factory for sale in Shah Alam
• Factory for rent in Shah Alam
• Factory for sale in Selangor
• Factory for rent in Port Klang
• Warehouse for rent in Port Klang
• Industrial property agent in Port Klang