Posted on 25 October 2013 - 07:42pm
Last updated on 25 October 2013 - 09:24pm
GEORGE TOWN (Oct 25, 2013): The property sector is expected to be resilient despite a 100% increase in the real property gains tax (RPGT) to 30% for disposal of property within three years.
Penang Real Estate and Housing Developers Association (Rehda) chairman Datuk Jerry Chan this was due to housing prices being pressured by costs which are not expected to come down.
He said the immediate impact will be felt in the secondary market as owners may now wait to sell their properties until after the period to avoid being hit.
"This meant that buyers now may have to wait a while longer before they could make purchases as sellers are reluctant to foot the tax bill," he said.
Nonetheless, Chan said property speculation activities may see a tapering due to the high cost of disposal.
"The affordable housing segment however may not be affected much as buyers here are on the lookout for a place to stay and not to flip," he told theSun.
Flipping is the term used for those who buy property and then quickly sell it at a higher mark-up for a profit.
Prime Minister Datuk Seri Najib Abdul Razak announced the RPGT was increased to 30% from 15% for disposal of properties within three years.
Penang Opposition Leader Datuk Jahara Hamid praised Najib for tabling a budget which addressed the concerns of the people.
She said many of the announcements – singling out the RM1 billion allocated to the 1Malaysia Housing Project (PR1MA) for providing 80,000 housing units – was proof that the government kept to its promises.
"He has also addressed the concerns raised by those who are against the implementation of the goods and services tax (GST)," she said.
In tabling the budget, Najib abolished the sales and services tax while introducing the GST which will be implemented on April 1, 2015 at a 6% rate.
Jahara's legislative colleague, Penang Backbenchers Club chairman Wong Hon Wai, was less optimistic about the GST. He said the move had changed the tax structure fundamentally.
Wong said the new consumption based tax posed a great challenge for businesses as well as the public.
"The effect of the GST will be felt on all sectors and there is a need to observe what will happen," Wong said.
Penang Women and Family Development Committee chairman Chong Eng chided the finance minister for not addressing the issue of work-life balance.
She said there were no policies to encourage women to stay in the workforce as well as for men to allow them to spend more time with their families.
She said the division of labour according to gender was an "old mindset" and called for policies which encourage the division of labour according to abilities and interests.
Chong Eng said, "This issue of social development was not addressed."