PETALING JAYA: The federal government has been urged to review its policy on the real property gains tax (RPGT) imposed on the sale of real estate, and to consider a sliding-scale tax rate.
National House Buyers Association secretary-general Chang Kim Loong said real estate was a long-term financial investment to hedge against inflation and provide financial security in a person’s later years.
He said the current property tax was akin to “a tax on inflation” where genuine long-term investors are punished.
In the past, no tax was imposed if a property was sold after five years, but the policy was changed in the 2019 budget.
Exemptions are only given for properties priced
under RM200,000. For Malaysians and permanent residents, a one-off exemption is
given for the sale of one property during their lifetime.
Economist Carmelo Ferlito said similar property policies were in place in other parts of the world and were unlikely to affect home owners’ decisions to sell their property.
Ferlito said Italy, his native country, had levied a tax on profits from the sale of homes regardless of how long they had been held.
However, he contended that the tax could result in
an artificial increase in the price of property. A seller raises his price in
order to achieve a certain profit after taking into account how much property
gains tax he would pay.
He also said if the government wanted to raise money, this was one way to do so without burdening the people, but if the aim was to increase home ownership, then there would be no benefit to continuing with a perpetual RPGT.