Edited conclusion to make my views clearer.
Hopefully kopiandproperty.com readers have also read this view a few times. My personal view is that our property market (Malaysia) is certainly nowhere near a crisis like in 1998 or 2008. However, the sentiment is pretty negative and everyone from the man on the street to businessman are all saying that the market is slow. Very slow. One main cause was due to the announcement of the never ending Real Property Gains Tax (RPGT).
It used to be ZERO RPGT when we sell the property after 5 years. Today, regardless of when we sell the property, we will be taxed 5% RPGT. As for properties bought long time ago, the valuation for the property will be a valuation in the year 2000. Yea, still pretty substantial. Here’s that earlier article: RPGT to be calculated using its value in year 2000 Well, now FIABCI Malaysia president Michael Geh is urging the government to review the RPGT come Budget 2020.
Article in thesundaily.my here. The International Real Estate Federation (FIABCI) president Michael Geh shared that both the primary and the secondary property markets are recovering. He said, “We hope that the government will relook at the RPGT which is deemed to be unpopular as perpetual RPGT is currently affecting those who are considering of upgrading their houses.“
He also said that the market is improving because of the market-friendly policies by the Housing and Local Government Ministry and the Finance Ministry. “So now we wish for more market-stimulating policies during the 2020 Budget, so that the property market can pick up next year.“ With regards to MM2H for foreign buyers, he said, “Linking property purchase with MM2H is a more acceptable way of persuading others to buy Malaysian properties. MM2H should be continued along with its stringent checks to make sure we are accepting genuine people who wants to live here and contribute to the economy here.“ Please do refer to the full Article in thesundaily.my here.
Hopefully our Finance Minister gets this message from Geh for his consideration. I think it’s quite important that it has been this way (zero RPGT after end of 5 years) for a long time and RPGT should be used to curb speculation. It should not be used as a means to tax the people who love to buy properties and keeps them for a long time. Please DO NOT remove the whole RPGT yeah. Just the 6th year onwards.
By the way, property buying may be a form of education savings for the children for example and no one loves to lose 5% of their savings when they wanted to use it for their children education in the future for example. Happy wishing and Budget 2020 will be announced next week.
Next suggested article: FIABCI Malaysia: No property bubble bursting soon