RPGT will not harm property market, says valuation department DG

KUALA LUMPUR: The re-imposition of the real property gains tax (RPGT) will not severely affect the property market, says Valuation and Property Services Department Director-General Datuk Abdullah Thalith Md Thani.

He says the local property market was still very much a "buyers' market" and the RPGT, to be reinstated on Jan 1, 2010, actually affected sellers.

"During the years of the RPGT, the property market was still going strong except during the 1997/98 (Asian) financial crisis," he told a media briefing on the upcoming 13th Malaysia Property Summit 2010, here.

The RPGT was waived on April 2007 as an anti-speculation measure as there were instances when a sale was over-valued to receive higher loan. RPGT is the tax charged on profits made from a property sale.

"We need to support the RPGT unless the government has another way of checking on the loans," says Abdullah Thalith.

Citing Singapore, he says commercial banks in the city-state had received a directive to be extra careful and strict on loan disbursements.

At the event, James Wong, president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS), concurred that the RPGT would put a check on sellers.

However, the issue was foreign investors might have the perception that the government was not consistent with its policies, he said.

"Foreign investments may be affected by this as they will think the government regulations are not consistent," he said.

Therefore, he said, PEPS had asked the government to exempt RPGT for properties held for more than five years and to bring forward the base year to Jan 1, 2000.

The RPGT was introduced in 1976, with the base year on Jan 1, 1970. -- Bernama