Malaysia Capital Gains Tax Guide 2026

No CGT on Securities and Shares

Malaysia stands out as a jurisdiction with no capital gains tax on the disposal of shares, stocks, bonds, or other securities. Key points:

• Listed shares (Bursa Malaysia): Gains from trading shares on Bursa Malaysia are entirely tax-free for individuals (unless the individual is classified as a day trader — see below)
• Unlisted shares: Gains from disposal of unlisted shares are also generally tax-free, provided the seller is not in the business of trading shares
• Bonds and sukuk: Gains from disposal of bonds, sukuk, and other debt securities are capital in nature and not taxed
• Unit trusts and REITs: Gains on disposal of unit trust funds and Malaysian REITs (M-REITs) are similarly tax-free for individuals

This tax-free treatment makes Malaysia a highly attractive jurisdiction for equity investors and traders.

Day Trading and Gains Deemed as Income

While capital gains are not taxed, gains from share trading may be treated as business income (and thus taxable) if the taxpayer is engaged in a regular and frequent pattern of trading. LHDN uses badges of trade to determine whether gains are capital or revenue in nature:

• Frequency and volume of transactions
• Holding period (short-term trades are more likely to be considered trading)
• Intent at acquisition (to earn dividends vs. to trade for profit)
• Use of borrowed funds for speculative trading
• Organised business structure (trading office, staff, systems)

In practice, most individual retail investors on Bursa Malaysia are not taxed on their gains. However, a full-time day trader with hundreds of trades per year may be deemed to be carrying on a business and taxed accordingly at progressive IIT rates (0–30%).

Real Property Gains Tax (RPGT) — Detailed Rates

RPGT is the closest Malaysia has to a capital gains tax. It applies to gains from the disposal of real property (land and buildings) and shares in real property companies (RPCs). Rates depend on the holding period and the seller's status:

• Disposal within 3 years: 30% (individual citizens & companies)
• Disposal in the 4th year: 20%
• Disposal in the 5th year: 15%
• Disposal in the 6th year and beyond (Malaysian citizen): 0% (if conditions met)
• Disposal in the 6th year and beyond (company): 5%
• Non-citizen / non-resident: 30% (<3yr), 20% (4th), 15% (5th), 10% (6th+)
• Non-citizen company: 30% (<3yr), 20% (4th), 15% (5th), 5% (6th+)

RPGT Exemptions and Reliefs

Several exemptions are available to reduce or eliminate RPGT liability:

• One-time lifetime exemption: Malaysian citizens can claim an exemption on gains up to MYR 200,000 (or 10% of chargeable gain, whichever is higher)
• Private residence exemption: Disposal of a private residence between family members (parent-child, grandparent-grandchild) is exempt
• Spousal transfer: Transfer between husband and wife is fully exempt from RPGT
• Gift of property: A gift between family members may be exempt if it is a bona fide gift (not for consideration) — but RPGT may still apply if the disposal is deemed to be at market value
• Compulsory acquisition: Land compulsorily acquired by the government is exempt

Shares in Real Property Companies (RPCs)

RPGT also applies to the disposal of shares in a Real Property Company (RPC) — a company whose assets consist principally (≥75%) of real property or shares in other RPCs. When shares in an RPC are disposed of, the gain is subject to RPGT as if the underlying property were disposed of. The same RPGT rates and holding period rules apply. This prevents property-rich companies from being used to avoid RPGT on property transactions.

Other Capital Asset Disposals

For other capital assets (e.g., machinery, vehicles, intellectual property), gains on disposal are generally not subject to capital gains tax. However, balancing charges may apply under the capital allowance regime for depreciable assets — if an asset is sold for more than its tax-written-down value, the excess is recaptured as income and taxed accordingly. This is not a capital gains tax but a recapture of previously claimed allowances.

FAQs

Do I pay tax on profits from selling shares on Bursa Malaysia?

No, gains from trading listed shares on Bursa Malaysia are not subject to capital gains tax for individuals. This makes Malaysia one of the most tax-friendly jurisdictions for equity investors.

Can day traders be taxed on their share gains?

Yes, if LHDN determines that the trading activity constitutes a business (based on the badges of trade), gains may be taxed as business income at progressive IIT rates. However, this typically applies only to very active traders with high frequency and volume.

What is the RPGT rate if I sell my home after 6 years?

For Malaysian citizens, the RPGT rate is 0% on disposal in the 6th year and beyond (subject to conditions). For companies holding property, the rate is 5%.

Do non-residents pay RPGT differently?

Yes. Non-citizen individuals pay 30% (<3yr), 20% (4th), 15% (5th), and 10% (6th+). Non-citizen companies pay 30% (<3yr), 20% (4th), 15% (5th), and 5% (6th+).

Disclaimer

This guide provides general information about Malaysian capital gains tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified tax advisor or LHDN directly for advice specific to your situation. InvestmentKit does not provide tax advice.