KUALA LUMPUR, Oct 25 — The doubling of the Real Property Gains Tax (RPGT) to 30 per cent for properties disposed within three years of acquisition will halt property prices from skyrocketing further, the National House Buyers Association (HBA) said today.
HBA also welcomed the announcement by Prime Minister Datuk Seri Najib Razak today during the tabling of Budget 2014 that the Developers Interest Bearing Scheme (DIBS) — where the developer pays the interest payments for the buyers’ loans during the construction of a property — would be banned, noting that the scheme was popular among property speculators.
“The government has taken a step in the positive direction with measures to slow down the steep rise in property prices due to false demand and excessive speculation fuelled by easy mortgages and previous low RPGT (Real Property Gains Tax),” said HBA honorary secretary-general Chang Kim Loong in a statement today.
“The National House Buyers Association (HBA) have consistently called for government intervention to prevent a ‘homeless generation’ of young adult Malaysians’ from emerging, especially in urban and sub-urban areas who, if not for wild speculation, would be able to buy their own houses,” he added
In Budget 2014, the RPGT was also revised to 20 per cent for properties disposed within the fourth year of acquisition and 15 per cent on the fifth year.
HBA also approved of Putrajaya doubling the minimum price of property that may be purchased by foreigners from RM500,000 to RM1 million.
“Foreigners must be prevented from ‘snapping up’ property meant for the lower- and middle-income and, thus, artificially inflating property prices and creating a domino effect which can result in higher property prices across the industry,” said Chang.
“This is especially true for development corridors such as Iskandar Development, which has seen foreign purchasers arriving in droves and sweeping up properties with their superior exchange rate,” he added, referring to the economic region in Johor, near neighbouring Singapore.
HBA, however, urged Putrajaya to increase the stamp duty to a flat rate based on the property price for the third and subsequent properties to discourage speculative buying, but said that the current stamp duty should remain the same for the first two properties bought.
“The government’s current low stamp duty regime has been misused by property speculators to accumulate multiple properties, driving up these prices by creating false demand and denying genuine buyers the opportunity to buy such properties,” said Chang.
He also said that Putrajaya should remain committed to fulfilling its promise made last year that it would implement, by 2015, the build-then-sell 10:90 system, which is where a buyer pays a deposit of 10 per cent and the remaining 90 per cent balance will be paid only upon completion of the property.
“Our proposed road map for a gradual phase-in will ensure that developers participate in the concept by periodical participation,” said Chang.
