KUALA LUMPUR, Nov 4 — The government collected RM81.52 million in real property gains tax (RPGT) in the first eight months of this year from the disposal of properties held for more than five years, which involved 8,554 transactions.

This raised the total RPGT collected as of August 2019 to RM1.1 billion, which was a good performance, said Deputy Finance Minister Datuk Ir Amiruddin Hamzah.

The government, he said, had no plans currently to abolish the tax on disposal of properties held for more than five years, as it had been implemented for less than a year (being effective Jan 1, 2019).

“However, the government will look at the effectiveness of the RPGT imposition and the performance of the property market as a whole,” he replied to a query by Datuk Seri Dr Wee Ka Siong (MCA-Ayer Hitam) during the special chambers in the Dewan Rakyat today.

Effective from Jan 1 this year, individual citizens and permanent residents have to pay tax on chargeable gains from properties and shares disposed after the fifth year of ownership. Prior to that, no RPGT was imposed on transactions done from the fifth year onwards.

Amiruddin said the RPGT imposed on chargeable gains for properties sold from the sixth year onwards expanded the tax base and helped curb speculative activities that put pressure on housing prices.

“In the 2020 Budget, the government has improved the RPGT treatment for the disposal of properties after the fifth year by re-setting the base year to determine market value from Jan 1, 2000, to Jan 1, 2013. This means that the market value in 2013 would be used even for properties acquired prior to that year,” he noted.

Amiruddin said as the market value for 2013 would be higher compared to that in 2000, the tax on Malaysian citizens and permanent residents would therefore be lower and not a burden.

“Besides, RPGT will only be imposed if there is a gain on the disposal or sale of property,” he added.

With 2013 as the base year, the government would be recording a slightly lower revenue from the imposition of RPGT after the five-year period compared with if the treatment were current, he said.

“Nonetheless, the RPGT revenue will grow from year to year if the base year remains unchanged and in tandem with the property market’s performance,” he added.

News Source: Bernama, 4th November 2019.