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If you have been searching for more information on the new Budget 2010 RPGT announced by our Prime Minister , you might be confused as some news reported that RPGT will fall back to the Real Property Gains Tax Act 1976, where seller of property can be tax up to 30% from their gains. In the other hand, you also read news that the new policy will only tax not more than 5%. You can read the details of RPGT Act 1976 here.
Here are my views:
Short term (Now up to Dec 2009)
Speculators or Property investors (who hold more than a single property in hand) will try to offload their properties in hand to market. Also, owners who bought their houses long time ago (probably at developer’s price) that wish to upgrade/downgrade their home in the near future, may want to sell now than later as they are getting high gain. Example, some who bought Ara Damansara Double Storey Linked houses at RM 380K from developer and selling out to the market now at RM 680K, they will be tax up to RM 15,000! The pressure will be on supply as there are more property for sale, hence buyers have more choices and sellers are more open to bargain. This is a good time for buyers who really wish to purchase house for their own stay.
Long term (Jan 2010 onwards)
As you may notice that Banks are slowly pulling back their low interest rate packages. Many foresee that Banks will no longer be able to maintain giving out such attractive loan rates. 5% RPGT and higher interest rates may dampen property buyers’ sentiments and may deter speculative activities to a certain extent, leading to lesser property investors in the market. However, this may not affect the interest of buyers who plan to purchase home for stay. There is also a possibility that prices of property may go up as sellers tend to factor in the RPGT into the selling the price. The demand in the market after January 2010 will probably depends on how government’s plan to launch a scheme that enables EPF contributors to utilise current and future savings in Account 2. This will enable them to obtain higher financing to purchase higher value or additional houses.
2 comments ↓
[...] The rest is here: What to expect from the market over the new Malaysia Budget 2010 … [...]
Thanks for a very informative & well written article.
Helps a lot to me personally.
Keep it up, friend.
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