ABOLITION OF RPGT WILL SPUR THE PROPERTY MARKET

REHDA Malaysia welcomes the announcement by the Prime Minister YAB Dato' Seri Abdullah Badawi to remove RPGT imposition, as this would spur the primary and secondary property market in the short to medium term. The move would also encourage healthy speculative activity. Such increased transactions would have a positive multiplier effect on the economy.

REHDA’s view is that the Government’s decision is timely as such measure is supported by positive economic fundamentals, cash liquidity and good consumer and business confidence. Foreign and local investors who are purchasing for capital appreciation as well as locals who are considering to upgrade would benefit from this incentive.

REHDA President Mr Ng Seing Liong said, “The removal of RPGT imposition serves as a catalyst to spur local property transactions. This is certainly good news for the property and construction market.”

Expatriates who may have been hesitant on purchasing property due to a higher exit barrier would now be more confident to purchase without having to lose out on capital gains if they choose to sell off their properties before they leave.

As foreigners are only allowed to purchase properties costing more than RM250,000, property transactions in this range, particularly higher end houses are expected to rise. Such increased velocity is expected to trickle down to the other sub-sectors of the market.

Such a move would also result in a positive psychological effect amongst prospective house buyers. House buyers are now no longer faced with the issue of having to pay RPGT if they choose to realize property gains within 3 to 5 years of purchase. This would encourage many house buyers to make the purchasing decision knowing that they would be able to realize their gains without being taxed in the future.

REHDA believes that more can be done to further stimulate the housing and property industry. For example, a grant offered to first time house buyers to lighten their financial burden would have significant effect on house purchase. Secondly, waiver of stamp duties would stimulate more property transactions.

REHDA believes that a package or combination of incentives would spur greater interest among investors in our property market and hopes that the Government would provide the impetus for an effective long term strategy to sustain demand.

Statement issued by:

Ng Seing Liong, J.P.
President
Real Estate and Housing Developers’ Association