THE increased Real Property Gains Tax (RPGT) will have a negative impact on the property industry and will not prevent property prices from soaring.
Associated Chinese Chamber of Commerce and Industry (ACCIM) president Datuk Lim Kok Cheong (pic) said ACCIM was concerned about the flip-flop changes in the policy that would not be good for investors, especially foreign investors.
“The proposed changes to the RPGT discriminate against foreign purchasers. This is contrary to the Government’s earlier efforts to promote Malaysian property and foreign direct investments.
“The doubling of threshold of foreign property purchase to RM1mil is an overkill reaction.
“Foreign purchase is merely 5% of property transactions and such a meagre low 5% doesn’t drive up property prices,” he said.
ACCIM is of the view that instead of Band-Aid actions, the sustainable solution is to crank up supply of houses, according to Lim.
“The most important solution is to streamline and expedite approval for development in order to increase competition which will check price increases.
“The Federal Government’s actions have already dampened demand which will result in the reduced supply of houses. Changes in RPGT rates should not be retrospective.
“Investors who made their investment decisions based on the RPGT rate-schedule at the time of investment should enjoy the rate-schedule then and not be affected by the subsequent changes,” he said.
The RPGT is imposed on profits made on property sold within a set period of time, with a rate of 30% within three years, followed by 20% and 15% in the fourth and fifth year respectively.
No RPGT is imposed if a property is sold after six years.
“To make Malaysia an attractive place for property investment, we need policies that are transparent and clear, not those that are retrospective,” he said.