HBA secretary-general Chang Kim Loong noted that speculators who buy newly launched properties typically sell them after construction is completed two years later by which time they escape from having to pay the highest tax bracket of 15 per cent under the revised RPGT.
The RPGT was revised from 10 to 15 per cent for properties sold within two years and from five to 10 per cent for properties sold between two and five years.
“With attractive financing packages, very often these speculators just pay 10 per cent downpayment and walk away with lucrative gains at the end of the construction period,” Chang told The Malaysian Insider.
He said the HBA proposed for RPGT to be revised to 30 per cent for properties sold within two years for the first two properties and up to 30 per cent for third properties and above that are sold within the first 10 years.
“The majority of investors who purchase houses for their own stay or for long-term investments would not be affected by this proposal,” said Chang. “
He added it was puzzling that the government was serious about controlling the prices of essential items such as cooking oil, sugar, chicken and a host of other essential items but yet on the subject of house price, it has allowed the situation to remain “laissez faire”.
“But the alternatives for a roof over one’s family are the squatter areas, the shelters under our highway flyovers or the five-foot paths in front of shophouses!”
Developers however were relieved that the RPGT hike was smaller than feared.
Real Estate and Housing Developers Association (REHDA) patron and past president Datuk Eddy Chen said the association was glad that a “drastic increase” did not materialise.
He said that this showed that the government recognised surges in prices were less about speculation than about rising cost of materials as well as labour and compliance costs.
“We would not like to have had an increase in RPGT but we can live with this one,” he said.
Chen said the RM1.9 billion fund to build affordable housing was a positive development, lauding the RM500 million Housing Facilitation Fund for the government to build houses in collaboration with private housing developers.
The veteran developer said however that the government should review the impact of the incentives for the Tun Razak Exchange (TRX) which aims to attract financial firms to a site to be master developed by government agency 1MDB.
Chen said the incentives would create an imbalance in the property market in the capital city as other developers who owned land in the city would be at a disadvantage.
“We view TRX with great concern because of the incentives for the project,” he said. “The government should relook the project to create a level playing field and avoid a two-tier real estate market.”
Veerinderjeet Singh, chairman of tax advisory firm Taxand Malaysia, said the hike in RPGT was good as it sent a warning signal to speculators.
He also said that a hike in RPGT to 30 per cent would have been too much as it could have led to a shock to the property market.
“The government took a middle path of gradually moving up RPGT,” he said.