Date of publication: Oct 26, 2013
Section heading: Business Times
Page number: 004
Byline / Author: By Sharen Kaur
KUALA LUMPUR: THE hike in the real property gains tax (RPGT) and raising the threshold for properties that can be bought by foreigners to RM1 million will have an impact on developers, builders say.
Glomac Bhd managing director and chief executive officer Datuk FD Iskandar Mansor told Business Times that the government should punish speculators and not genuine investors or serious house buyers.
"The RPGT of 30 per cent is high. When you buy a property, you want some form of capital appreciation. Some buy and sell houses within three to four years for emergency reasons," he said, adding that the measures may cause a slowdown in the property market and impact growth as the banking sector would also be affected.
SP Setia Bhd president and CEO Tan Sri Liew Kee Sin said while residential properties will be exempted from the goods and services tax (GST), it does not mean that the cost of supplying such homes will be free from GST.
Liew said developers will still have to pay a six per cent GST on nearly all the inputs required to build houses, and this can further increase the cost of construction.
Mah Sing Group Bhd group managing director Tan Sri Leong Hoy Kum said the RPGT is aimed at speculators and since it is not an upfront tax, it would not be a deterrent to owner-occupiers or investors who buy properties for rental gains.
"In the long term, it may help to curb property speculation," he said.
Master Builders Association Malaysia president Matthew Tee believes that the RPGT increase can be maintained for a definitive period as there have been continuous hikes since 2010.