SEREMBAN: MCA has proposed that the government stop imposing the real property gains tax (RPGT) on assets disposed after 10 years of acquisition.
Such a move would be more effective to check property speculation as well as protect genuine buyers, said MCA civil society movement bureau chief Ng Kian Nam.
“Those who dispose their properties after 10 years cannot be speculators.
“So, it is only fair that the government amend the law which came into force in January where a 5% RPGT is imposed on any Malaysian who disposes his property from the sixth year onwards,” he told reporters.
During the tabling of Budget 2019 last year, Finance Minister Lim Guan Eng said the government would impose a 5% RPGT on all Malaysians and raise the tax by 5% for foreigners to 10% for those who sold their properties after the fifth year.
Previously, Malaysians were not charged any RPGT if they sold their properties after five full years of ownership.
Ng said the government’s decision to impose the 5% indefinitely after the fifth year of ownership appears as though it merely wanted to raise its tax revenue.
“It is actually increasing the burden on genuine buyers. This is also not fair for those who have inherited the property,” he added.
Under the current tiered tax system, the RPGT on properties acquired and sold within three years is 30%, four years (20%) and five years (15%).
Ng also urged the government to consider abolishing the RPGT on residential properties costing less than RM1mil.
Under a law which also came into force in January, those selling off properties worth less than RM200,000 need not pay RPGT after five years of ownership.
“The RPGT exemption given to residential properties costing less than RM200,000 is
too low. It should be increased to RM1mil to allow more genuine buyers to benefit,” he said.
Lim, when announcing the RPGT exemption, said it was for the disposal of properties, including low-cost houses, low-medium cost houses and affordable houses, from the sixth year onwards.
State MCA chief Siow Koi Voon said the authorities should have given a grace period to owners who had plans to dispose properties they have held for more than five years.
This was so that they would not be charged the 5% RPGT before the new law was enforced.
“Many people are upset with the short notice,” said Siow, who is a lawyer involved in conveyancing work.
Siow said the move to impose the RPGT on properties sold in the sixth year after its acquisition would not help stimulate the property market.
“Such a move would not be effective in curbing speculation but would only prevent cash from flowing into the market,” he added.