The re-imposition of the Real Property Gains Tax was announced by the Prime Minister Datuk Seri Najib Tun Razak in Budget 2010 on Oct 23.
The Real Estate and Housing Developers’ Association Malaysia (Rehda) is concerned about the re-imposition of the Real Property Gains Tax at 5% for disposal of real property effective next year.
Its president, Datuk Ng Seing Liong said such an imposition is counter productive to the efforts to stimulate the property market, especially in the current global economy.
“It will also discourage foreign investment in the property sector,” he said in a statement on Oct 23.
Currently, gains from the disposal of real property are subject to tax under the Real Property Gains Tax Act 1976 to curb speculative activities in the property market.
The rates of real property gains tax are progressive from 0% to 30%, depending on the holding period of the real property. However, real property gains tax was put on hold from April 1, 2007.
However, the association welcomes the various incentives and measures announced in Budget 2010 to further promote home ownership.
Among measures announced is the provision of another 74,000 low-cost houses for rental in 2010 by the National Housing Department (JPN).
On the efforts to promote construction of green buildings, Ng said the incentives to producers or suppliers will help keep costs of such features low and encourage more developers to embark on green developments.
“Rehda also lauds the immediate steps taken by the local authorities to facilitate registration of businesses and expedite the issuance of Development Orders in an effort to provide a conducive and friendly business environment,” he said.
He added that the allocation of RM3.7 billion to prevent crime would help to project a good image of the country and thus attract more foreign investors.
Ng also said that the reduction of the individual income tax rate to 26% and personal relief increase to RM9,000 would provide higher disposable income to the public.
He said the move is expected to increase their spending power, which in turn will provide a positive impact to the housing industry. - By Siti Radziah Hamzah (The Edge Property)
2 comments
The title is a bad news for property sector in Malaysia. How can they ask all home owner in Malaysia to keep all their receipt for like 20 years and when they sell still tax them 5%? The foreigner will be weary of this.. and announce this at this time? Just great!!
Agreed with Sunshine, even where a property was purchased over 20 years ago (how about more than 30 years or 40 years for that matter)a gain on disposal from 2010 will attract 5% RPGT.What is the formula for the calculation of the gain on disposal for these type of properties....20,30,40 years or more? Need more info on this.