Budget 2013: Curbing speculative activities in property market

KUALA LUMPUR: The government has proposed a review of the Real Property Gains Tax (RPGT) to curb the speculative activities in the real property market. The review will come into effect Jan 1, 2013.

Under the proposed RPGT rates, for properties disposed within two years, the new rates are 15% for companies, individuals, including citizens and permanent residents, and non-citizens.

"Real property owners who are not profit motivated and are not involved in speculation will not be renewed by the review of RPGT rates, under the proposals," according to the Budget 2013.

For individuals, both citizens and permanent residents, they are eligible for RPGT exemptions from the sale of one residential property once in a lifetime.

The RPGT exemption of up to RM10,000 or 10% of the net gains, whichever is higher, from the disposal of real property by individuals.

There is also the RPGT exemption on gains from disposal of real property between husband and wife, parents and children, grandparents and grandchildren.

In addition, RPGT is only imposed on net gains after deducting all costs involved such as the purchase price, renovation cost, legal fees and stamp duty. - The Star