The Government will raise the real property gains tax (RPGT) under the 2013 Budget to curb speculation in the domestic property market.
Prime Minister Datuk Seri Najib Razak said in his Budget speech that the RPGT will be increased to 15% for properties held and sold within two years, while the tax rate will be increased to 10% for entities disposed of between two and five years from the date of purchase.
The will be no RPGT for properties sold after five years from the time of purchase, according to Najib.
Under the 2012 Budget, the RPGT is 10% for properties held and disposed of within two years, and 5% for entities sold between two and five years.
Real estate consulting firm VPC Alliance (M) Sdn Bhd managing director James Wong said the domestic real estate market is already seeing a slowdown, hence, an increase in the RPGT is deemed unnecessary.
Commenting further on the 15% RPGT, Wong also questioned the need to raise taxes because property developers’ have a policy of not allowing first time buyers of their properties to sell their units within the construction period.
As developers aim to sell as many new properties as possible, Wong who is a former president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia, said allowing first time buyers to transfer their properties may affect the subsequent phases of property developers’ projects.
“I believe the aim of the higher RPGT is more for the government’s revenue collection,” Wong told theedgemalaysia.com via telephone.