Re-introduction of RPGT to have significant impact on the public, says PricewaterhouseCoopers executive director

PETALING JAYA: The re-introduction of real property gains tax in Budget 2010 will have a significant impact on the public, said PricewaterhouseCoopers Taxation Services Sdn Bhd executive director Ng Say Guat.

“It is a big hit to a generation of people like our grandparents and parents who hold properties for more than five years. Definitely a big hit because since 1976, the rate was zero for properties of more than five years,” she said while presenting a paper on “2010 Budget Impact on Real Estate” at the FIABCI Malaysia Morning Talk here on Nov 4. 

“Maybe it is a desperate measure to curb the deficit,” Ng added. “From a tax perspective, the budget is very tax collection-driven,” she said.

However, she added that people also shouldn’t be overly sceptical over the 5% RGPT.

She said property developers have given their feedback about how property owners are reacting to re-introduction of RPGT.

“We are getting comments from property developers. They say that suddenly, a lot of people are planning to sell and buy over the next two months,” she noted.  

The government had suspended the RPGT on April 1, 2007, to boost the national property sector, enabling investors to upgrade and move up the property ladder.

But it would soon come into effect again next year, as announced in the 2010 Budget late last month. 

As for foreign interest in Malaysian property, Ng felt that the 5% RGPT may not affect foreign investors much.  

“The 5% is probably nothing compared with RPGT in Australia, which is higher,” she said.