THE government is mulling the possibility of hiking the real property gains tax (RPGT) to rein in rising house prices and curb speculation in the market.
This, said Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan, was because the current RPGT levels had not been effective in stabilising house
prices.
“There may be a need to increase RPGT to curb unhealthy speculation in the housing market,” Rahman said after launching the 16th Malaysia Housing and Property Summit here yesterday.
RPGT was raised last year to 15 per cent from 10 per cent for properties sold within two years of purchase.
The government also raised RPGT to 10 per centfrom five percent for those sold between two and five years.
Asked whether the move would be announced in the 2014 Budget, Rahman said the decision to raise the RPGT was up to Prime Minister Datuk Seri Najib Razak.
“I wouldn’t say there will be an increase in RPGT in the upcoming budget. As far as I am concerned, we are studying the possibility and if it can cool down the market, it will be on the table.”
Market analysis has shown that the prices of houses in Kuala Lumpur and some areas in the Klang Valley, such as Mont Kiara, Hartamas and Puchong, have increased by between 15 per cent and 30 per cent in the last two years.
It is understood that the idea of raising the RPGT is to discourage people from buying and selling houses for quick profit. The RPGT is also another source of revenue for the government.
The House Price Index by the National Property Information Centre showed that in 2011 and last year, the house price index had recorded the highest increase in the last five years, especially in Selangor, Kuala Lumpur, Penang, Pahang, Sabah, Perak and Terengganu.
The government had also adopted other initiatives to allow more Malaysians, especially from the low- and middle-income groups, to own houses.
The establishment of PR1MA Corporation Malaysia (PR1MA), under the PR1MA Act 2012, was to plan, develop, construct and maintain affordable housing for middle-income households (those with a monthly household income of between RM2,500 and RM7,500).
Najib had said he was aware of the financial pressures faced by the urban middle-income population because of the country's rapid urbanisation and had made known his vision of rebalancing assistance to those in both rural and urban areas.
PR1MA is one of the initiatives to help the people manage costs of living in urban areas and is the first programme that targets the middle-income group, with homes ranging from RM100,000 to RM400,000 in a sustainable community.
PR1MA projects have been launched in many parts of the country, where house prices have spiralled beyond the means of middle-income earners.
Under the scheme, each unit is sold for between RM150,000 and RM300,000, depending on its location and size.
Each unit is between 800 and 1,400 sq feet, with three bedrooms and two bathrooms.
Applicants must be first-time buyers for the scheme.
They need to occupy the house and can obtain loans of up to 105 per cent from selected financial institutions, with a payback period of up to 30 years.
To prevent speculation, PR1MA house buyers are not allowed to sell within 10 years.
- nst.com.my
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