That 5% in RPGT announced in Budget 2019? Okay, most of my friends with properties said that it’s not good for them. One said, “Now I have to pay a few hundred thousand ringgit in tax?!” I laughed and said NO you will not. This is real property gains tax. So, even for a RM400,000 property which had doubled to RM800,000 the 5% RPGT is actually RM20,000. (RM800,000 – RM400,000 = RM400,000 x 5% RPGT = RM20,000) It is not RM800,000 which is selling price x 5%. Anyway, he is still unhappy that he has to pay the extra tax since he has held the property for more than 5 years from the time he bought it. Perhaps the government would also need to communicate in numbers on what would the effects be. Many remain unclear how RPGT is calculated.
According to some analysts, the RPGT can be looked at positively. Here’s that article in TheStar.com.my KPMG Tax Services Sdn Bhd executive director Evelyn Lee says that the government has taken positive measures to raise revenue without taxing the lower- income group in Budget 2019. This is her comment about the RPGT. “This move is designed to increase revenue and not to curb speculation and targeted for assets held more than five years.” Meanwhile Raine & Horne Malaysia senior partner Michael Geh said the RPGT increase was slight and fair. He added, “The move will encourage more people to hold properties for their own use for a longer period.” As for the stamp duty for properties priced above RM1mil, Geh, “It won’t have a significant impact on the property market.” The article for reference here.
Personally, I believe one strategic reason for the RPGT is also to curb some supply of properties into the market so that the transactions can be more skewed towards the unsold properties instead which is over 35,000 units for unsold and completed units. As for how bad is the unsold properties, we can look into state by state as per image. On an overall basis for Selangor and Kuala Lumpur, the unsold and completed units are not considered critical at this point in time. Nevertheless, the lower the number, the better the sentiment will be because many first-time home buyers are worried to make their decisions for fear of the unsold property news. It may be a good time to hunt for a property because even the stamp duties for SPA / Loan are now waived for properties below RM300,000.
written on 7 Nov 2018
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