Kuala Lumpur: The impact from the real property gains tax (RPGT) hike, a move to curb speculation in the property market, will be gradual.

RPGT is a tax on properties sold less than five years after they are bought. Only the profit from the sale of a property is subject to RPGT.

It has been doubled to 10 per cent for the first two years and will remain at the previous level of 5 per cent in the third, fourth and fifth year. There will be no tax on gains after the fifth year.

RPGT exemption on a residential property is given to both husband and wife on one residential property each, once in a lifetime.

Yesterday, Prime Minister Datuk Seri Najib Razak in his 2012 Budget speech said that the existing rate of 5 per cent is not effective in curbing speculative activities and could jeopardise the ability of the low- and middle-income groups to buy houses.

These changes, he said, are low enough not to affect genuine property owners and will curb speculative activities.

Chairman of the Property Management, Valuation and Estate Agency Division of the Royal Institution of Surveyors Malaysia Adzman Shah Mohd Ariffin said that the move will deter future sales of property within two years of purchase. With prices stabilising and should they sell fast, they will not be able to make a killing.

“But, for those who bought a property three years ago, the price appreciation would have been much higher than the 10 per cent RPGT imposed,” Adzman said, adding that this category of buyers will continue to make a profit.

According to him, properties can appreciate by 20 per cent or more once completed.

Real Estate and Housing Developers’ Association Malaysia president Datuk Seri Michael Yam welcomed the move.

“The fact that there is no drastic change to the ruling on RPGT encourages long-term ownership of property which also helps the owner with capital appreciation and wealth creation as they will hold on to the property longer,” said Yam.

He added that the first two years are effectively a 100 per cent increase, thus it will help discourage short-term speculation.

“It is a gentle/soft landing which will avoid a dip in the supply and demand of property,” Yam told Business Times.

“The increase in this instance is not unreasonable, given that there are no speculative activities in the entire country but only confined to pockets of urban areas like Kuala Lumpur and Penang. These pockets of activities are insignificant compared with the total supply and demand for housing in Malaysia,” he added.

However, real estate agent Rahim & Co’s managing director Robert Ang said the 10 per cent increase is not an effective measure to try and curb speculation activities.

“If you want to curb speculation, why not something higher?” he said.

SOURCE: Business Times

Government proposes to increase the limit of house prices under the My First Home Scheme from a maximum of RM220,000 to RM400,000 beginning January 2012.

The government today proposed a review of the Real Property Gains Tax (RPTG) to curb speculation.

The government has proposed that for properties held and disposed within two years, the RPTG is 10 per cent for both companies and individuals. For properties held and disposed within a period exceeding two years and up to five years, the rate is five per cent for both.

However, properties held and disposed after five years, are not subject to the RPGT.

If not controlled, speculative activities will put pressure on the price of real estate, Prime Minister Datuk Seri Najib Tun Razak said when tabling the 2012 Budget in Parliament, here today.

Najib, who is also the Finance Minister, noted that in the long run it would jeopardise the ability of the low and middle-income groups to buy houses.

“I am confident the revised RPGT rates are low and will not affect genuine owners and curb speculative activities,” he said.

Source: Bernama

GEORGE TOWN: Penangites should not be kept in the dark over talk of land reclamation along the Bayan Lepas coastal area.

Pantai Jerejak Barisan Nasional coordinator Wong Mun Hoe urged the state government to “come clean” on its dealings with Boustead Holdings.

“The reclamation of 40ha is estimated to be worth RM400mil without taking into account the sales profits — it doesn’t take a super accountant to do the maths and see that the compensation amount does not make economic sense,” he said.

Pantai Jerejak assemblyman Sim Tze Tzin had earlier said the state government was forced into a negotiation with Boustead after the company was required to scale down the height of the high-rise Royal Bintang Hotel which was approved for construction in the Unesco World Heritage zone under the previous state government.

Wong said residents of the area were in the dark as they did not know what development would be taking place in their own backyard.

“They may face a development tsunami and yet remain unaware of what’s going on until it’s too late to do anything.

“Where are the much touted CAT (competency, accountability, transparency) values?” he asked at a press conference in Bayan Lepas yesterday.

Wong alleged that Sim knew about the reclamation offer since May but he did not engage the residents here.

Bayan Baru Barisan coordinator David Yim Boon Leong, who was present, asked the state government to reveal whether any traffic and environmental impact assessment report had been conducted before the land reclamation offer was made to Boustead.

“There are other alternatives. Offering so much land for reclamation would impact the whole of Pantai Jerejak,” he said.

On Wednesday, State Local Government and Traffic Management Committee chairman Chow Kon Yeow reportedly said the state government had proposed compensation in kind in the form of reclamation rights but negotiations on alternatives were still ongoing.

On Oct 3, some 350 residents living in six condominiums and houses along Persiaran Bayan Indah in Bayan Lepas held a peaceful protest and press conference following information they received on reclamation plans for the area by a developer.

They want the seafront in the Bayan Bay area to be spared of any future land reclamation projects.

Bayan Bay Residents’ Action Committee chairperson Sharifah Hamidah said the residents were not against development but were more concerned about the quality of life.

Source: The Star

WORK on the construction of a RM2mil bridge over a stream along Jalan Kulim in Kampung Machang Bubok near Bukit Mertajam has been suspended temporarily following objections from shopkeepers there.

State Public Works, Utilities and Transportation Committee chairman Lim Hock Seng said the shopkeepers had complained their business had been affected following the partial closure of the road last week.

“The authorities will decide later whether the project would be scrapped,” he said after visiting the project site with state Agriculture and Agro-based Industries and Flood Mitigation Committee chairman Law Choo Kiang and representatives from the Public Works Department (PWD) and Drainage and Irrigation Department.

Lim said the PWD had closed off one lane of the road to enable the contractor to bring in heavy machinery for land clearance and piling works.

“However since the project would take a year to be completed, shopkeepers are worried their business will be badly affected due to traffic congestions there,” he said.

Lim said traffic was heavy along the road which is near the Penang-Kedah border.

He said the project was mooted after villagers complained of frequent flash floods. Some had complained the floods were caused by the box culvert covering the drain and utility pipes across the stream which was blocking the water flow.

Source: The Star