RPGT Relief When Property Is Gifted Within The Family

Giving away a property is still treated as a disposal under the Real Property Gains Tax Act, even though no money changes hands. Ordinarily, a gift is taxed as if the property were sold at its market value on the date of the transfer.

The law softens this for transfers within close family. Where the person giving the property and the person receiving it are husband and wife, parent and child, or grandparent and grandchild, and the giver is a Malaysian citizen, the giver is treated as having made no gain and suffered no loss on the gift.

The recipient does not get a fresh, higher starting point either. The recipient simply takes over the giver's original acquisition price exactly as it stood, which already accounts for costs the giver paid at the time such as legal fees and stamp duty. On top of that unchanged figure, the recipient also inherits any separate cost the giver later spent on improving the property or defending title to it, which the law treats as its own distinct category of allowable expense.

This means the tax is not cancelled by the gift, only delayed. When the recipient eventually sells the property, the gain is measured from the original owner's cost, not from the property's value on the day it was gifted.

Families planning to pass property down should keep the original purchase documents, since that is the figure that will matter when the next sale happens.

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