The government has shown it is not serious about curbing speculation in the property market by announcing such a small increase in real property gains tax (RPGT) in the Budget.
The RPGT has been raised from 10 to 15 per cent for sales within two years of purchase and from 5 to 10 percent for sales within two to five years. This will do little to curb speculation as a 10 percent tax is chicken feed compared to the huge profits that speculators stand to make.
To go some way in curbing speculation, an RPGT of at least 30 percent would be more like it.
I suspect the real reason the government has been reluctant to raise RPGT higher is that it now has stakes in the high-end property market via government-linked companies involved in the property sector such as 1MDB and Sime Darby or indirectly through stakes in listed property development firms.
Why, even the EPF now has its own property development firm. Its wholly owned subsidiary, Kwasa Land Sdn Bhd, has bought 2330 acres of prime Rubber Research Institute land for RM2.3bn for which it will be the master developer.
Then, of course there are the crony property developers and the merry band of speculators who are making a ‘killing’ in the property market.
Meanwhile, the speculation continues.