Published: Saturday November 23, 2013 MYT 12:00:00 AM
Updated: Saturday November 23, 2013 MYT 9:54:14 AM
BY DAVID TAN
|Making a point: Participants giving their views during a round table dialogue |
on Budget 2014 held at the Henry Butcher office in Burmah Road, Penang.
THE Real Property Gains Tax (RPGT) will not have much of an impact in deterring speculators from buying property, said KPMG partner Ooi Kok Seng.
Ooi said since the RPGT was only 30%, property speculators would still be left with a profit margin of 70%, which was still attractive in drawing speculators.
He was speaking during a round table dialogue on Budget 2014 hosted by Henry Butcher Malaysia (Penang) recently.
“RPGT will not curb speculations in the long run but the removal of the Developer Interest Bearing Scheme (DIBS) will.
“Many property buyers have entered the local property market via the DIBS scheme which allows them to pay 5% outlay to buy property without paying any interest during the construction period,” Ooi said.
On the proposed Goods and Services Tax (GST), Ooi said the GST on building materials would raise residential property prices.
“The increase in commercial property prices will however be slight as developers can obtain rebates from the Federal Government for the GST paid on building materials to construct a commercial project,” he said.
Henry Butcher Malaysia (Penang) vice-president Shawn Ong said the property market would cool off slightly next year as residential property prices had reached unprecedented level.
“Over the past five years, property prices in Penang had gone by about 6% annually,” Ong said.
Spiral Synergy Sdn Bhd director Michelle Grimsley said the RPGT would not deter foreigners from buying property in Penang because most Western expatriates were not buying for speculation.
“Most of them buy new property in Tanjung Bungah area to stay,” she said.
The RPGT rate for property disposed within three years is 30%, disposal within four to five years is 20% while no RPGT will be imposed for property disposed in the sixth and subsequent years.
Also present at the dialogue were Hong Leong Bank senior branch manager John Lau, KPMG partner Ooi Kok Seng, and Henry Butcher Malaysia (Penang) Teoh Poh Huat.