KUALA LUMPUR: With the upcoming budget sending mixed signals to the real estate market, Datuk Vincent Tiew, acting executive director and head of sales and marketing at Andaman Property Management Sdn Bhd, said it may not be very friendly for property developers and investors.
He believes several parties will be anticipating drastic changes to the real property gains tax (RPGT).
"Whether the current RPGT policy is effective or not, I would say that it can do better. The holiday perks should expire this year, and if the government wants it to be more effective, it needs to be tougher and the percentage [for RPGT] higher," Tiew said during the PropertyGuru Developers’ Forum held in Eastin Hotel in Petaling Jaya on Sept 12.
The forum was moderated by PropertyGuru Malaysia country manager Gerard Kho, with a panel of speakers comprising Tiew, Austin Heights Sdn Bhd group managing director Datuk Steven Chong, Malaysia Property Inc general manager Veena Loh and Binastra Group general manager of property development Steven Ooi.
The RPGT and affordable housing were among the key issues highlighted at the forum.
Ooi, Chong and Loh agreed that the government should let the market grow freely, as slowing down the prices would affect house sales on the secondary market.
"If the government imposes RPGT in the fourth and fifth year, the secondary market is going to get affected. So, I think the government should consider leaving it as it is. As an investor, speculation is what we do. For the property market to be viable, speculation is part of it. Let the market take its own course and don't be so hard in the upcoming budget," said Ooi.
"The government should focus on allowing people to own homes. Let investments grow freely. Why would it want to introduce measures to curb speculation? If the property market is booming, we are benefiting from it. Why kill the investment market?" said Chong.
"You don't want to kill the market, but you do want to curb speculation, to a certain extent," said Loh.
Ooi said the government should not place all the responsibility of supplying affordable houses on developers.
"It should be a joint responsibility and affordable housing shouldn't be the developer's problem," he said.
Tiew said he would rather pay the state government for it to take over the building of low- and medium-cost houses, according to its specifications.
According to Kho, the RPGT should not be used as a diversion from the main issue.
"We lose track of the main issue at hand and we go back to it each year, without finding a solution. Prices keep increasing, making it difficult for new buyers in the market," he said. "The RPGT is a levy on the profit and not the price of the property, and that RPGT is not the issue."
Tiew echoes Kho's stand that RPGT is not the issue, but his main concern is the increase in stamp duty.
"That is going to financially impact the buyer at the point of purchase," he said. "It's a capital direct outflow that must be paid when you stamp your documents. If the percentage increases, it can be difficult for buyers, when they want to pay for their properties."
This article first appeared in The Edge Financial Daily, on September 13, 2013.
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