Budget 2020 is coming up, and what better way to welcome it in the property market than with sending out our wishlist? Property market leaders have made their requests known, and we concur with them.
RPGT
The Malaysian Real Property Gain Tax has been a contention point since they were changed in the Budget 2018. The biggest group this change affected are the investors, who are now expected to pay a 5% tax upon selling their property in the 5th year, where prior to this they would be tax-free.
The secondary group affected by this change were long-time property owners, especially families and the elderly, whom the property has been in their possession for years. Many a time, this group of people wish to dispose of their property to have a home upgrade – and the 5% RPGT charge on them is an additional burden.
Hence as of Budget 2020, it is the public’s wish that the government reconsider the current RPGT rates, as genuine home buyers who are looking to upgrade their homes are being caught in the backlash of the imposed RPGT as well. All suggestions point to going back to the previous RPGT rates.
Read more: Is 5% RPGT a “Tax on Inflation”?
Stamp Duty
Another suggestion that involves going back to previous rates involves the Stamp Duty. Previously set at 3% for properties priced RM1 million and above, the rate was increased to 4% in Budget 2018.
While increasing the Stamp Duty is believed to be a good move to curb property speculation, the timing was also deemed to be bad as the property market is already stagnant. Adversely, it has the untoward side effect of increasing the property overhang for properties costing over RM1 million.
Property Overhang
This brings us to our next point – property overhang. Property overhang is defined as units that have obtained their Certificate of Completion and Compliance (CCC) but still remains unsold and untenanted for 9 months after.
The property overhang for properties worth above RM1 million comprises 42.47% of the total number, while condominiums and apartments form 42.7% of the property overhang. By reverting the RPGT and Stamp Duty to their original tiers, it is expected that the property overhang will reduce.
Affordable Housing
Affordable housing another issue that the government should be looking into. Only in recent years has this sector been given attention, and there is still a shortage of affordable houses. The reasons for this include the lack of integrated data and location feasibility. There is also a lack of coordination between the different affordable home bodies, resulting in some of the homes being built too close together.
The above is a summary of the pertinent issues that should be addressed in the Budget 2020, and we look forward to seeing how the relevant authorities respond to these requests!
(7 October 2019)