The existing rate is not effective in curbing speculation and could jeopardise the ability of the low- and middle-income groups to buy houses, says Najib
RPGT is a tax on properties sold less than five years after they are bought. Only the profit from the sale of a property is subject to RPGT.
It has been doubled to 10 per cent for the first two years and will remain at the previous level of 5 per cent in the third, fourth and fifth year. There will be no tax on gains after the fifth year.
RPGT exemption on a residential property is given to both husband and wife on one residential property each, once in a lifetime.
These changes, he said, are low enough not to affect genuine property owners and will curb speculative activities.Chairman of the Property Management, Valuation and Estate Agency Division of the Royal Institution of Surveyors Malaysia Adzman Shah Mohd Ariffin said that the move will deter future sales of property within two years of purchase.
With prices stabilising and should they sell fast, they will not be able to make a killing."But, for those who bought a property three years ago, the price appreciation would have been much higher than the 10 per cent RPGT imposed," Adzman said, adding that this category of buyers will continue to make a profit.According to him, properties can appreciate by 20 per cent or more once completed.
Real Estate and Housing Developers' Association Malaysia president Datuk Seri Michael Yam welcomed the move. "The fact that there is no drastic change to the ruling on RPGT encourages long-term ownership of property which also helps the owner with capital appreciation and wealth creation as they will hold on to the property longer," said Yam.
He added that the first two years are effectively a 100 per cent increase, thus it will help discourage short-term speculation.
"It is a gentle/soft landing which will avoid a dip in the supply and demand of property," Yam told Business Times.
"The increase in this instance is not unreasonable, given that there are no speculative activities in the entire country but only confined to pockets of urban areas like Kuala Lumpur and Penang.
These pockets of activities are insignificant compared with the total supply and demand for housing in Malaysia," he added. However, real estate agent Rahim & Co's managing director Robert Ang said the 10 per cent increase is not an effective measure to try and curb speculation activities."If you want to curb speculation, why not something higher?" he said.
Sourced from: BT