Real property gains tax (RPGT) may be increased to curb speculation
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
“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.