5% property gains tax seen as a temporary move

KUALA LUMPUR: The Government’s proposal to impose a real property gains tax (RPGT) of 5% from Jan 1 may just be a temporary measure, says Taxand Malaysia Sdn Bhd managing director Dr Veerinderjeet Singh.

From left: Irene Dorner, Dr Veerinderjeet Singh and Taxand executive director Kang Beng Hoe at the seminar.

“We feel that it is a temporary imposition. We think that in the long term, the original scale rates of 30%, 20%, 15%, etc will be coming back,” he told a press conference prior to a seminar on Budget 2010 jointly organised by Taxand and the Malaysian International Chamber of Commerce and Industry (MICCI) yesterday.

Prior to the exemption of the RPGT in April 2007, tax on gains from property sales was on a progressive basis from 30% to 0% depending on the holding period of the property.

Veerinderjeet however, said that total exemption from RPGT would be unlikely.

“What would probably not change is the 5%,” he said.

He called the RPGT tax imposition a “revenue generating measure that has not gone down too well with individuals.”

“We do agree that 5% does not appear to be sensible. Whether there will be a lot of revenue to be collected, we’re not sure – it depends on the transactions. But people would probably be happier if this took effect from 2011 rather than next year.”

He added however that property owners should be thankful that the RPGT was capped at 5% and not higher.

http://www.starproperty.my/PropertyScene/PropertyNews/675/0/0