Government may rethink real property gains tax (RPGT)

Well, I certainly hope so! And do it quickly.
What a lousy timing to announce the reintroduction of RPGT. With the economy barely out of recession and the road ahead beginning to look less winding, suddenly we see a road block in front of us.
Some may say RPGT of 5% is not a big issue. Let’s look at the implications. In April 2007, RPGT was exempted. After just two and a half years, this exemption was lifted. This potrays inconsistency and uncertainty. Taboo to investors. What’s next? A sudden increase of RPGT to 30% without any warning… yes, it might happen.
Back to lousy timing… the reintroduction of RPGT will take effect in January 2010. There is too little time to react. Even if one sells the property immediately, it takes time for the transaction to go thru and RPGT will be imposed. Why not give us the time to react, say starts in July 2010 or even better January 2011?

8 comments:

Anonymous said...

I agreed with you.
The 5% RPGT will be big issue for those owners who going to dispose their property that purchased 20 or 30 years ago whereby the gap between the Selling Price vs Purchase Consideration is a BIG.

Jason Y said...

yeah.. for illustration :
Bought a semi d in Subang Jaya in 1979 for RM80k. Sell the semi d in 2009 for RM700k. Gain is RM620k. So RPGT is 5% on RM620k = RM31k. That's 1 year salary to some ppl.

Jason Young said...

Good news... RPGT will only apply to property sold less than 5 years from its purchase. Government announced this on 24 Dec 2009. Hope this helps the property sector.

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Patrick said...

I admit, I have not been on this real estate blog in a long time… however it was another joy to see it is such an important topic and ignored by so many, even professionals. I thank you to help making people more aware of possible issues.
Great stuff as usual….

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Patrick said...

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Jason Young said...

Thank you for your visit.