Budget 2012 ~ New RPGT (Property Gain Tax) Rate
Last Updated on Sunday, 09 October 2011 07:18
The current rate of 5% on real property gains tax (RPGT) is not effective in curbing real estate speculative activities. If not controlled, it will put pressure on the price of real estate. In the long run, it will jeopardise the ability of the low- and middle-income groups to buy houses. To overcome this concern, the Government proposes the RPGT rate be reviewed. For properties held and disposed within 2 years, the RPGT rate is 10%. For properties held and disposed within a period exceeding 2 years and up to 5 years, the rate is 5%. Properties held and disposed after 5 years are not subject to RPGT.
Most houses are sold before construction starts and buyers bear risks of projects being delayed or abandoned. To protect buyers, the Government will encourage the construction of more houses using the build then sell concept. For this purpose, Islamic banks have agreed to provide shariah-compliant financing and undertake construction risks. Instalments only commence after the house is completed. This scheme will be implemented for houses costing RM600,000 and below.
Malaysia Budget 2012