THE hike in the real property gains tax (RPGT) is not expected to have a significant impact on the property market, according to property consultants and analysts.
Under Budget 2013, the Government has proposed the RPGT from the disposal of properties made within a period not exceeding two years from the date of purchase will be taxed at the rate of 15% and at 10% for disposal of property within a period of two to five years.
This represents an increase from the present RPGT regime, where RPGT of 10% is applied to properties held and disposed of within two years, and a rate of 5% was maintained for properties sold within the third, fourth and fifth years after purchase.
For property disposed of after five years from the date of acquisition, RPGT is not applicable.
Property consultancy CB Richard Ellis (M) Sdn Bhd executive director Paul Khong said the RPGT hike would have some impact on property sub-sales, particularly in the higher end and luxury segments.
“We would have preferred the RPGT to remain status quo,” said Khong.
Property analysts also said the RPGT increase was not a re-rating catalyst for the sector.
“In fact, we expect an upwards correction for property stocks next week because they were sold down in the past two weeks, due to anticipation of tougher measures for the sector in Budget 2013,” an analyst said.
HwangDBS Vickers Research analyst Yee Mei Hui said the impact on the property industry from the budget was minimal. “Sales have softened in recent months although we believe they will pick up,” she said.
Yee said the RPGT increase was not as drastic as most people expected while there was no stamp duty increase, despite what the market expected.
“Overall, not as bad for the industry,” she added.
Valuer Elvin Fernandez from the Khong & Jaafar group of companies said the marginal increase in RPGT showed continuity on the part of the Government to reign in speculation.
“This marginal increase will work well with the Bank Negara current measures, the latest being to base lending on net income, instead of gross income,” Fernandez said.
Meanwhile, the Chartered Tax Institute of Malaysia said it welcomed the measures undertaken by the Government to address the needs of first-time house buyers by relaxing the conditions for raising finance, and curbing speculation through the RPGT hike.
In a statement, property consultancy C.H. Williams Talhar & Wong managing director Foo Gee Jen noted that affordable housing had been the hot pre-budget topic and “true to expectations, the Government has attempted to address the concerns of the people.”
However, Foo pointed out that without proper planning, there could be a mismatch of demand versus location, if the housing projects were located in areas without adequate infrastructure and facilities.
Commenting on the RPGT hike, MKH Bhd group managing director Datuk Eddy Chen Lok Loi said: “It is obvious that the Government is aware that although there is speculation, it does not warrant a drastic RPGT regime.”
Mah Sing Group Bhd managing director and chief executive Tan Sri Leong Hoy Kum said the marginal increase in RPGT would have less impact on developers as new projects’ construction period was usually two to three years. - The Star
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