3 November, KUALA LUMPUR – The increase in Real Property Gains Tax (RPGT) on the profits from the disposal of real estate, as proposed in the 2019 Budget, will see increases in sub-sale prices of real properties, says the Malaysian Institute of Architects (PAM).
President Ar. Ezumi Harzani Ismail said although the proposal is intended to curb speculation, it affects the actual sub-sale needs of home-owners upgrading to a better new home.
The sub-sale price will also increase due to upgrading or renovation of the property by the owner.
Taxation on the increase of the value upon sale due to upgrading is not just to the owner and may cause property price inflation to cover the tax factor, he said in a statement today.
Ezumi Harzani applauded the proposal for stamp duty exemption, saying it would boost property sales, although the six-month window period for the exemption is far too short and would cause a sudden surge in the number of transactions.
It would be better if the exemption period can be extended to two to three years to allow a more moderate sales improvement which can also stimulate other economic activities.
A portion of the RM1.5 billion budget allocated for Program Perumahan Rakyat, Perumahan Penjawat Awam Malaysia, the 1Malaysia People’s Housing Project and Syarikat Perumahan Nasional Bhd needs to be invested in research and development (R&D) involving construction industry professionals, he said.
He noted that this would provide better housing solutions, rather than just putting all the stakes on building houses.
The RM22 billion value of property overhang shows that the issue is not about supply shortage, but the mismatch between the supplied houses and prospective buyers needs and affordability.
Through R&D, better quality houses at affordable prices can be produced to match the needs of the people, he pointed out.