The recent announcement of a doubling of the Real Property Gains Tax (RPGT) in Malaysia – from 15 percent to 30 percent for properties sold within the first three years – will certainly put a damper on Singaporean property investors who look to Malaysia to make quick cash gains.
Speaking to the Malaysian National News Agency Bernama, Steve Melhuish, co-founder and Chief Executive Officer of PropertyGuru Group, said: “Speculative investors are an attractive cluster for Malaysian property developers because their primary aim is flipping property within a limited period of time – say within the first two to three years.”
“My concern now is that with the new 50 percent rise in RPGT kicking in, Singaporean investors who were previously ploughing money into Malaysia property may now choose to hold on to their money instead,” he added when asked about the recently tabled 2014 Budget by Prime Minister Datuk Seri Najib Tun Razak.”
Last week Najib, who is also Finance Minister, announced that the RPGT will be increased to 30 percent for properties disposed of within the first three years for both individuals and corporates compared with 15 percent previously.
The RPGT has been increased to 20 percent for properties sold within the fourth year and 15 percent for properties disposed of within the fifth year for both individuals and corporates.
For properties disposed of in the sixth and subsequent years, no RPGT is imposed on individuals but companies are taxed at five percent.
Commenting on the Malaysian government’s effort to address fiscal debt, Melhuish said the Prime Minister is certainly taking the right steps to address fiscal debt and the introduction of the six percent GST will help the government claw back additional revenues.
“With the six percent GST introduction, Prime Minister Najib is not forgetting Malaysians, and benefits are in place to help weather the additional costs for consumers, and projects in place to generate jobs and assist low-income earners.”
“Singaporeans will still find Malaysia an attractive travel destination. The currency exchange is still highly favourable so absorbing the additional six percent will be negligible,” he added.
PropertyGuru is the leading property portal in Asia and one of the top 10 property portals globally.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg
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