Saturday, October 24, 2009
Real Property Gain Tax is BACK!
In the 2010 budget which was announced recently by Najib Razak, the Prime Minister and Finance Minister, it looks like Real Property Gain Tax (RPGT) which was suspended by then Prime Minister Abdullah Badawi in 2007 to boost the property market is now back.
"The Government needs to ensure that the Malaysian tax system is equitable and able to generate revenue for development purposes. In line with this, the Government proposes that a tax of 5% be imposed on gains from the disposal of real property from 1 January 2010. However, the existing tax exemption wll be retained for gifts between parent and child, husband and wife, grandparent and grandchild. This exemption will also be given on disposal of a residential property once in a lifetime."
What does this mean? Speculators, i.e. people who buy to flip once the property is completed are screwed.