News: REHDA Wants Real Property Gains Tax Reduced To Zero

Apr 7, 2020

With the Covid-19 pandemic reducing the disposal income of people, the Johor Real Housing Estate and Developers Association (REHDA) called on the Federal Government to reduce the real property gains tax (RPGT) to 0% for the next one or two years. 

“Covid-19 has affected everyone and the property sector is expected to feel the pinch even more as people have less disposal income and are saving what money they have,” said Johor REHDA Branch Chairman Datuk Steve Chong Yoon as reported in The Star.

“We will see delays in completion of development projects as construction work has been put on hold due to the movement control order (MCO), which the government has extended until 14 April.”

Read our complete guide on what is the Real Property Gains Tax here! 

The state government should also release more unsold bumiputera sites and lower the threshold for foreign property buyers in Johor, currently pegged at RM600,000, he added.

“This will help developers in overcoming the issues we are facing due to Covid-19, and will hopefully help spur the local property sector.”

Under Budget 2019, the government announced an RPGT of between 5% and 30%, depending on how long an individual owned the property before selling it.

An RPGT of 5% is imposed on those who sold the property after the fifth year, while an RPGT of up to 30% is imposed if the property is sold within three years or less.

The government revised the RPGT levied on the sale of properties after five years under Budget 2020 by setting the market value on 1 January 2013, as the property acquisition price for those purchased prior to said date, compared to the present base year of 1 January 2000.

This effectively lowers the tax payable by property owners, particularly those who acquired property before 1 January 2000.

 

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