KUALA LUMPUR, Nov 7 — A local property consultant firm has today called on Putrajaya to increase stamp duty in house purchases, claiming the measure will prove more effective in curbing speculations and spiralling house prices.

In a press conference here, Rahim & Co Chartered Surveyors Sdn Bhd also noted that while the bolder revision of the Real Property Gains Tax (RPGT) may cut down speculations, it will not be to the extent of “heavily dampening the market”.

“We think that the RPGT would impact the market ... but we feel strongly that additional measures should be imposed on stamp duty for the third houses and over,” Rahim & Co’s executive chairman Datuk Abdul Rahim Rahman told reporters here.

“We think that it would be justifiable if we want to stop speculations and perhaps stop in a way the increase of house prices.”

The firm proposed a three-tier system for the purchase of one’s third property and above, grouped into properties valued below RM100,000, between RM100,001 and RM500,000, and above RM500,000.

The proposed revised rates of stamp duty are one per cent, three per cent, and five per cent for each tier, replacing the initial rates of one per cent, two per cent, and three per cent respectively.

According to Abdul Rahim, the hike in stamp duty has been implemented in Singapore to curb speculations, and is especially targeted at foreign purchasers.

He also noted that there are four different implementations of stamp duty in Hong Kong (HK), with the normal rate of ad valorem stamp duty between 0.005 per cent to 4.25 per cent for HK permanent residents not owning any residential properties.

HK permanent residents who have already owned property will be charged a special rate between 1.5 per cent to 8.5 per cent, while any properties sold within 36 months of purchase can be subjected to either 20, 15, or 10 per cent of duty.

Meanwhile, non-permanent residents in HK are charged buyers stamp duty of 15 per cent.

In Budget 2014 tabled last month, Putrajaya doubled the RPGT to 30 per cent for properties disposed within three years of acquisition, 20 per cent within the fourth year, and 15 per cent on the fifth year.

Putrajaya also did away with the Developers Interest Bearing Scheme in which the developer pays the interest payments for the buyers’ loans during the construction of a property, which was seen as an incentive for speculation.

The minimum price of property that may be purchased by foreigners was also doubled from RM500,000 to RM1 million.

Rahim & Co pointed out today that the office and industrial sector will see minimal impact from the RPGT hike, unlike residential, especially in key urban areas, and commercial properties.

Leading global property consultant firm Knight Frank had said last month that Putrajaya’s bid to bring down house prices through the tax raise in Budget 2014 will see a slow and gradual decrease rather than an immediate drop.

According to its Malaysian branch managing director Sarkunan Subramaniam, the only way that Putrajaya can bring house prices down is by flooding the market with new properties.

The RPGT hike was slammed by the Real Estate and Housing Developers’ Association Malaysia last week, calling the move “insignificant” and detrimental to the property sector.

The association was also critical of the decision to raise the floor price of property available to foreign buyers, saying this measure may encourage builders to reduce the number of smaller properties, such as studio or single-bedroom apartments, as they will not be able to price these in the seven-figure range.

On the opposite end of the spectrum, however, the National House Buyers Association enthused over the measures, expressing confidence that it would go towards preventing a “homeless generation” of Malaysians.

The House Price Index by National Property Information Centre showed that in 2011 and 2012 the house price index recorded the highest increase for the last five years especially in Selangor, Kuala Lumpur, Penang, Pahang, Sabah, Perak and Terengganu.

Putrajaya has been under pressure to address the issue, after an increasing number of Malaysians complained that home prices have soared beyond what average wage earners could afford.

The government last week committed to building more “affordable homes” to cater to low and medium-income households, promising another 223,000 such units throughout the country next year.