KUALA LUMPUR: Stamp duties and real property gains tax (RPGT) on the third and subsequent properties should be increased to curb speculative buying of properties, the National House Buyers Association (HBA).
The government has been imposing low stamp duties to encourage home ownership but speculators had taken advantage of them to accumulate multiple properties and manipulate property prices.
"The situation has been getting worse with the so-called 'Investor Club' manipulating the property market through block purchases. You just need to attend one of their seminars or conventions, you will know what I mean," HBA secretary-general, Chang Kim Loong, told Bernama.
While the association wants the government to maintain the current formula of one per cent for the first RM100,000 for the first two properties, the association also wanted those buying third property to pay at least five percent of the purchase price as stamp duty.
Chang also suggested that a higher stamp duty be imposed on fourth and subsequent properties, probably a flat rate of 7.5 percent for the fourth property and 10 percent for the fifth property.
"This will not penalise the genuine house buyers as they normally buy one property as home and another for long-term investment. However, this will penalise the speculators who accumulate multiple properties to sell them at a higher price," he said.
Chang said HBA also wanted the RPGT to be increased as the current rates were low and had little impact on short-term speculators who continued grabbing houses for profit, thus pushing up property prices to unbelievable levels.
"Currently, properties disposed of within two years of acquisition are liable for 15 percent RPGT, three-five years (10 percent) and no RPGT is imposed on property disposed of after five years of acquisition,
"What is happening now is that speculators acquire multiple properties directly from the developer. It normally takes two years to be completed, which means they can sell upon completion and only pay a meagre 15 percent RPGT," he said.
Therefore, HBA is proposing 30 percent RPGT on properties being disposed of within two years, 20 percent between two-three years and no RPGT imposed on property that is sold after five years of purchase.
However, for those who own a third and subsequent property, a 30 percent RPGT should be imposed for properties disposed of within 10 years.
"We have submitted our ten-point proposal to the Ministry of Finance during the recent Focus Group meeting. We hope the government adopts our proposal to curb price speculation," he said.
The Focus Group meeting on Aug 2, was chaired by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah to discuss the income inequality issue to solicit input for consideration under Budget 2014, which will be tabled in Parliament on Oct 25. - Bernama
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