MALAYSIA - The National House Buyers Association (HBA) has welcomed the Government's proposal to increase the Real Property Gains Tax rate, which it said would help stabilise house prices.
The revision was also lauded as an "excellent mathematical formula" to prevent the emergence of a "homeless generation" among young adult Malaysians, HBA honorary secretary-general Chang Kim Loong said.
He said the prices of houses had skyrocketed over the past three years due to speculative buying in the real estate market.
"The Government has taken a step in the positive direction with measures to slow down the steep rise in property prices due to false demand and excessive speculation fuelled by easy mortgages and previous low tax," Chang said in a statement.
Datuk Seri Najib Tun Razak announced that a Real Property Gains Tax rate of 30 per cent would be imposed on gains on properties disposed within the holding period of up to three years.
The tax will be 20 per cent and 15 per cent if the property is disposed within the fourth and fifth year respectively.
Malaysians will escape tax if the disposal is made in the sixth and subsequent years while non-citizens will be required to pay a rate of 5 per cent for the same period.
Otherwise, a tax rate of 30 per cent will be imposed on non-citizens for gains from properties disposed within the holding period of up to 5 years.
The association also welcomed the announcement to increase the minimum price of property that can be purchased by foreigners from RM500,000 to RM1mil.
"Foreigners must be prevented from snapping up property meant for the lower and middle-income and thus artificially inflating property prices and creating a domino effect which can result in higher property prices across the industry.
"This is especially true for development corridors such as Iskandar Development which has seen foreign purchasers arriving in droves and sweeping up properties with their superior exchange rate," said Chang.
He also called on the Government to review the stamp duty as an additional measure to bring house prices under control.
"The current stamp duty payable for the transfer of properties is based on the value of the property.
"The Government's current low stamp duty regime has been misused by property speculators to accumulate multiple properties, driving up these prices by creating false demand and denying genuine buyers the opportunity to buy such properties," he said.