RPGT: A Solution Looking For A Problem

The market’s has already softened since the first quarter of the year. If the idea is to curb speculation, this is way too late:

Real property gains tax expected to rise
Experts divided on quantum of increase

PETALING JAYA: Real property gains tax (RPGT) would probably increase after Budget 2012 but experts are divided over the quantum or the new form the tax on property sales would take.

Few are hoping for the rate to be maintained but others felt the RPGT would increase by another 5%. The current RPGT, imposed after Budget 2010, is 5% for all properties sold within the first five years of purchase.

Previously, from April 2007 until it was reintroduced in January 2010, all gains from property transactions have been exempted from the tax.

If the Government decides to reintroduce the RPGT in its entirety, property speculators will feel the heat as gains from property sales within the first five years of purchase will be subject to a tax ranging from 5% to 30%.

If however the goal is to raise revenue, then this makes better sense even if we’re not exactly talking about gobs of money.