PETALING JAYA: With
the number of property transactions and new project launches having dropped
since the Government's market cooling measures imposed early this year, will
there be further tightening of the market to rein in property speculation or
will there be some easing in Budget 2015?
National House Buyers
Association honorary secretary-general Chang Kim Loong, who supports further
tightening, urged the Government to impose stronger measures to deter property
speculators in the form of higher real property gains tax (RPGT) and stamp
duty.
Chang said although
Budget 2014 had reinstated the quantum of RPGT for profits made from property
transactions that were owned for less than five years, "the measure is not
enough as it does not differentiate between genuine long-term investors who buy
properties for their children or as a hedge against inflation versus
speculators."
In Budget 2014, the
RPGT for profits on properties disposed of within the first three years was at
30%, and for disposals within four to five years, the rates were 20% and 15%,
respectively.
He said that for
long-term investors, their portfolio would typically be held for more than 10
years compared with speculators who hold for three years (construction stage)
to perhaps six years (to escape the RPGT).
"HBA is of the opinion
that for the first two properties disposed, the RPGT can follow the Budget 2014
rates, but for the third and subsequent properties, the RPGT should be at a
flat rate of 30% for properties held within 10 years from the date of
acquisition.
"Only those who
transact their property after holding them for more than 10 years should be
exempted from tax," Chang told StarBiz.
Property valuers and
consultants, however, do not expect any further increase in the RPGT as they
feel the market has stabilised to a more sustainable level since the
introduction of the cooling measures in Budget 2014.
CB Richard Ellis
Malaysia group executive director Paul Khong said the current measures were
more than sufficient to cool the market and that "hopefully Budget 2015 will
bring back some goodies to the property sector after the tightening of the
market since 2012/13."
Khong said a reduction
of the overall RPGT rates would be welcomed by all sectors as "this will bring
back some of the action to the investment market which should be healthy".
He also called for a
relaxation of the current financing guidelines in 2015 to ease end-financing
for low and mid-priced properties, and the reintroduction of the developer
interest bearing scheme (DIBS) for first-time house buyers, especially for
those who qualify financially and preferably for their own occupation.
VPC Alliance Malaysia
Sdn Bhd managing director James Wong said Budget 2014's cooling measures such
as the removal of DIBS and tightening of bank borrowings had reduced
speculation in the property market to a large extent.
He does not expect any
further changes to the RPGT, noting that the current rates were healthy and
acted as a sufficient curb for property speculation, and will encourage more
long-term investment in the property market.
Wong said the property
market was undergoing a consolidation phase, and that any further changes to
the RPGT "will send the wrong signal that the Government seems to be
interfering too much in the property market and will further dampen the
property market".
However, he
recommended an increase in stamp duty to a flat rate of 3% for the third
property purchase, and also measures to regulate and control property investor
clubs.
Khong & Jaafar Sdn
Bhd managing director Elvin Fernandez said RPGT had played a smaller role in
deterring excessive speculation compared with the ban of DIBS, and responsible
lending guidelines.
"For now it could
remain in place as it is. In the longer term RPGT must be aligned in a holistic
way to play a part in the total framework of policy to keep property prices as
close to their fundamentals as possible," Fernandez said.
Knight Frank Malaysia
managing director Sarkunan Subramaniam also felt that there should not be any
further changes to the RPGT.
"The last revision (Budget 2014) has already
incorporated a significant increase in the RPGT rates. If reviews are too
frequent, they may not augur well for the industry as they would affect
potential investors' perception of Malaysia's property sector policy," he said.
