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.
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Someone forwarded me this excellent article on Budget 2013.
“Budget 2013 – What the Government Doesn’t Want You to Know”
http://www.financetwitter.com/2012/10/budget-2013-what-the-government-doesnt-want-you-to-know.html
You will not get such good analysis on mainstream newspapers.
The growth does not tell a true picture. 70% of our economy pie is governed by 4 sectors, petroleum, gas, palm oil & electronics. If these sectors register growth of over 5.5%, then there is contraction in the other 30% (that includes thousands of industries and miliions of workers). We have had growth before but why is disposable income still declining??? PR has to work harder to make people understand the importance of disposable income. Other than prudent economic planning, one major factor is corruption and corruption is related to our check & balance. Thus, reforms are badly needed, not… Read more »
And Rais “changed my mode” Yatim gushed:
“…opposition will not have the opportunity to criticise the 2013 Budget…”
Permisssion to puke my guts out, pleeeeze!
Looks like REHDA’s continued presence and influence in the Natl Economic Action Council and Putrajaya’s ears (aka Mr Michael Yam) has continued to pay-off.
I guess they must know how to reward BN when the election time comes.
With many multi-millionaire & billionaire stake holders & cronies hanging tightly onto frenzy building industries as the fast route to billionaire status, who cares what monstrosity of unsustainable development of gambling proportion that threatens the future soundness of our economic stability & environment.
In this digital age of easy transfer of monetary wealth across borders, their sense of national prudence & responsibility is suspect-ably absent in their voracious appetite for more gamble.
property market is fleecing the rayaat esp the poor and the mid income. with this small increase in RPGT, speculation will be worst !!
What Rubbish is the Property Gain Tax. If you buy a property for RM 100,000/- Sell it for RM 200,000/- Profit is RM 100,00/- Property Gain Tax is 15% = RM15,000/- So he makes RM 85,000/- after 1-2 years, What Rubbish is this. How is the Govt. going to stop property speculation So all he gets RM 185,000/- This is how cash rich buyer makes money and deprive poor class and middle class genuine buyer And the property will soon be priced at RM200,000/- that is sub-sale. Who is Najib protecting the buyer or the speculators/profiteers. Ini lah Malaysia Satu.… Read more »
Actually, you would be really lucky if you can get a decent unit for RM 200 k in Penang. Even ‘the pulse’ next to oasis considered to be medium cost project is now selling above RM 300k for units under 1000sf in size.
Pulse is considered a Low Medium Cost projects and upgraded was sold for 160+K, Now selling for 330k and above and its only 797 sq ft
The bubble will not burst but splatter … The property market run by the evil triad of developers, local authorities and banks are out to (squeeze) both its citizens and the country’s economy. Najib didnt do anything because he needs the money and keep his cronies happy.
55% Bolehland income (revenue) come from Petronas oil tax. Now just so used to easy spending. Later when Petronas runs out of oil, other forms of revenue like GST on the way.
Life is easy by 2020 ? Be prepared !
Sugar increase 20c to offset payout that does not help the poor or for the rakyat in general but for election purpose. Our country coffer will be dry soon and if you continue with the cheat and cheap, the GST 4% will be implemented of which you have to pay pack 10 times. Now you pay 20c which increase the price of others goods> RGPT 15% will not stop speculation. Whats is 15% or 10% if you can make 100-500k or 1 millios. LGE policy to prevent foreigner from buying less than 2 miilions will help to curb curb speculation.… Read more »
If foreigners want to buy property in Pg I doubt they would go for the cheap or average priced ones in the first place. They would be aiming for those in the millions so the ruling may not have a great impact on property prices. Besides the state has said that foreign buyers only make up 3% of property sold . As for the Kampung Melayu flats, a new coat of paint and minor repairs have been carried out. This is a move in the correct direction. However, the state govt should be mindful that the surrounding area and infrastructure… Read more »
Just to illustrate a point, compare this in Pg
http://pictures.my.ippstatic.com/realtors/images/640/2547/2965c648794d408bbb34179298958280.jpg
to these in Sg
http://farm3.static.flickr.com/2671/4155276792_310f78f86e.jpg
http://1.bp.blogspot.com/_u2mwdNjwm3E/TO0aJj77zKI/AAAAAAAADdk/thzj9nI_wgA/s1600/HDB+flat.JPG
Both are very old flats built a long time ago for the poor. The building has a similar design, similar density and probably a similar size but. But there is a huge difference in the surrounding environment. The is a huge difference in the general amenities. And despite the age, there is maintenance. When can we achieve such standards?
Imagine this scenario: A speculator got an ‘insider trading’ of a yet to launch (publicly) condo for Rm500K, then prior to/on launching date registered as legitimate purchaser, then within a few months or 1 year sold it off at Rm550K. He needs only pay Rm7,500 real property gains tax (15%), and happily pockets Rm42,500. The shorter time frame the better than FD & amanah! And if he has a ready buyer before official launching, he can even get Ah Long loan (24hr approval) to pay a booking fee/down payment & yet make a handsome profit! I still feel gomen should… Read more »
Congrats to 1Malaysia PM Najib for his effort to tackle property speculation problem. Unlike LGE who do nothing to stop property speculation in Penang.
I also impress with 2013 people centric budget particulary BR1M v2.0 and bonuses for civil servants. Discount for PTPTN loans, tax cut and lots more.
Janji ditepati, undilah BN !!!
The primary target of this budget is the 21-30 year old generation who will be the first time voters (25% of total voters). These people are more interested in instant goodies like the RM2500 for singles earning below RM3K and the RM200 rebate for smartphones.
BN is only fishing for new votes among these group of people. For those above 40, life is going to be tough. Retirees soon will find their purchasing power reduced with the coming GST. Vote for Ubah before the oil of Petronas is dried by BN!
Anil, it seems that your new comment rating system again already hacked by HM Andrew I or somebody else. -25 just now after Andrew I said “hello” to me. If you allow such manipulation then, you are part of it. Is this the 2 party system you are talking about ??? Suppressing any unfavourable but truthful comments toward pakatan means 2 party system ??? Just tell me how much donation you receive from pakatan ???
p/s: I’m little emotional here.
No, I don’t think it has been hacked by anyone. Minus 25 sounds about right 😉
No donations from Pakatan or any other party.
Only the cheat will be afraid
Is property sector a reliable global economic driver of a nation’s wealth? Just think of it: Properties have become more pricy a gaya-lifestyle product beyond local consumer affordability that is has become a ‘gambling’ asset for the lack of a better word besides speculative asset. It has also become cheaper-to-foreigner raiding assets to buy, speculate & dump (in the event of bubble burst). Like the stock market, it is vulnerable to unhealthy manipulation (by local & foreign speculators) & false market sentiments, no thanks to property gurus & speculative false (1st) buyers. Is this what Malaysia wants for its economic… Read more »
Correction:
If Malaysian leaders don’t break away from this 50 years of divide & rule & cronyism, we are on the one-way ticket to Timbuktu wasteland of ghettos & hungry ghost condos, the by-product of concentrated high-priced property investment foolishness.
While Boleh Land is encouraging property bubble, Hong Kong is taking steps to curb foreign buyers from spoiling market & render average Hong Kees homeless. TheStar reports: Hong Kong to restrict foreign homebuyers from 2013 Hong Kong on Thursday announced the first step in a policy aimed to restrict foreigners from buying property, in a move seen to be targeting mainland buyers who have been blamed for pushing up property prices. Chief executive Leung Chun-ying said only Hong Kong permanent residents will be able to buy flats to be built on two sites that will provide around 1,100 homes next… Read more »