Budget 2014: Wide support for revised Real Property Gains Tax

Budget 2014: Wide support for revised Real Property Gains Tax

PETALING JAYA - The increase in the Real Property Gains Tax (RPGT) to discourage speculative buying has come in for wide support, and not just among people looking to own homes.

Fomca secretary-general Datuk Paul Selvaraj said he backed the Budget 2014 proposal of almost doubling the RPGT to 30 per cent as it was essential to curb speculation.

"We feel the Government did listen to consumers, and owning a house has now become a higher possibility," he said.

"However, the hike in RPGT must be accompanied by an increase in affordable housing projects."

The RPGT is imposed on the profit made on properties sold off within a set period of time, with a rate of 30 per cent within three years followed by 20 per cent and 15 per cent in the fourth and fifth year respectively. No tax is imposed if a property is sold after six years.

Centre for Public Policy Studies chairman Tan Sri Ramon Navaratnam said the RPGT was a good way to dampen speculation and even prevent a possible property bubble.

On the impact it might have on ordinary people who are not speculators but wish to sell their property within five years, Ramon said: "It is not even a reasonable proposition. For most people, buying property is one of the biggest life decisions.

"So, if one is planning to rid oneself of a property in under six years, one must either be a really bad investor or already has speculative motives."

MCA president Datuk Seri Dr Chua Soi Lek hoped that increasing the RPGT would dampen property speculation, but said the Government had to build more affordable houses in the long run.

"Houses with grossly inflated prices are beyond the reach of many Malaysians," he added.

In Johor Baru, first-time homebuyers hope that increasing the RPGT would improve their chances of owning a property.

Operations manager Sean Cheng, 26, welcomed the move but said the Government should think of more ways to control property prices because "the tax will be quite pointless if the developers increase the price of houses".

Businessman S. Jason Raj, 35, suggested raising the RPGT to at least 50 per cent for foreign buyers.

Executive assistant Natasha Farhana Rohaizat, 24, agreed with the increase in the RPGT, saying: "I feel that it is the speculators who buy and sell property that is making the prices of houses constantly go up."

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