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Govt to monitor effect of new RPGT regime in 1H14

PETALING JAYA: The government will be monitoring the property market closely when the new real property gains tax (RPGT) regime is enforced on  Jan 1 next year, said Deloitte tax leader Yee Wing Peng.

“Perhaps in six months [from the commencement of the RGPT regime], we would be able to better gauge how the market is responding to this,” Yee told the press at the tax forum, Deloitte TaxMax 2013, yesterday.

He anticipated that within that time frame, the government would be able to determine whether or not the increase in RPGT is a good enough measure to cool down the market and curb speculation.

Yee said the volume of property sales and purchase transactions would be a good indicator of the market response to the new regime.

The tax leader suggested an increase in stamp duty by one to two percentage points to bring the stamp duty to 4% to 5%, as a measure to help cool the property market even further.

“If the property market remains hot, and speculation cannot be curbed, what the government can do is to introduce higher stamp duty on the buyer,” he said.

Another measure that can be introduced is to impose stamp duty on the seller as well.

According to Yee, Singapore is an example where non-resident sellers have to pay a stamp duty of up to 17% for disposing of their property within a year.  

“These are flexible measures that the government can introduce depending on the circumstances and the state of affairs of the property market at a particular time,” said Yee.

The forum also featured speakers from Iskandar Regional Development Authority (IRDA), the Performance Management and Delivery Unit (Pemandu) and the European Union Malaysian Chamber of Commerce and Industry (EU MCCI).

At the forum, senior vice-president, economics and investment for IRDA Gan-Low Mei Leong commented that the new RPGT regime is a positive move to curb speculation and to bring real investors into the Iskandar region.

She pointed out that while in the past property buyers would be looking at the combined salaries of themselves and their spouses before deciding to buy property, the trend over the past two to three years was to buy many properties at one time to profit from the resale value once the project is completed.

“We want to curb the speculation so there will be time for new players to come in, and more opportunities for real investors to buy. We look at it as something good and a breathing point for Iskandar Malaysia,” said Gan-Low.


This article first appeared in The Edge Financial Daily, on November 13, 2013.

 

 

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