PETALING JAYA: The government is considering a review of the Real Property Gains Tax (RPGT), which under Budget 2019 will be increased from 0% to 5% for sales after the fifth year for Malaysian individuals and from 5% to 10% for corporates and foreigners.
Political secretary to the Finance Minister and MP for Damansara Tony Pua said there is room for fine-tuning.
“The minister has heard a lot of feedback on RPGT and we are in the midst of looking at how it can be fine-tuned further, whether it is a time restriction or also to take into consideration enhancements that individuals have made to the property as a cost invested into the property as a deductible expense,” he said during a panel session at the Budget Commentary 2019.
He said the RPGT was one of the areas identified as somewhere the government can transact without distorting the market too much.
On the auction of land, Pua said the purpose of the land will be predetermined before the bidding process starts, thus the government will be able to get the best value of the land.
He said the purpose of the land, for example public housing or free trade zone, will be determined and land conversion will be done before parties are invited to bid.
Meanwhile, Rehda Institute has proposed to establish a Residential Real Estate Investment Trust (REIT) to provide rental public housing for the B40 group.
Its chairman Datuk Jeffrey Ng said it is conducting studies on the REIT after which it will submit the proposal to the Housing and Local Government Ministry and Finance Ministry.
“We are working with investment banks and accountants. Once we have formalised the proposal, we will submit to both ministries. Then the next stage is to submit to the Securities Commission,” he told reporters at Rehda’s Budget Commentary 2019 today.
He said the proposal was made by Rehda Institute through its Affordable Housing Report and it will continue to pursue this financial framework to help the government build more rental public housing.
“The proposed Residential REIT is aimed at assisting the government in building up the supply of public social rental housing for the lower income group who cannot afford to buy. The institute will be formally submitting our proposal and will be engaging the Finance Ministry on this new transformational financial vehicle for the rental housing sector,” he added.
Ng said affordability is still an issue thus providing more homes via public social renting could improve the B40 group’s livelihood instead of encouraging them to buy houses.
The institute is also working with the Malaysian REIT Managers Association to establish the proposed REIT.