October 24, 2009 17:41 PM
Authorities Have To Clear The Confusion Over RPGT
KUALA LUMPUR, Oct 24 (Bernama) -- The authorities must clear the confusion over the real property gains tax (RPGT) proposal and whether it will be fixed at five per cent or reduced from a high of 30 per cent for disposal within a holding period of two years to five per cent eventually under the Finance Bill.
Based on the Finance Bill, disposal within two years of acquisition will be taxed at 30 per cent, 20 per cent in the third year, 15 per cent in the fourth year while disposal in the fifth year and beyond will still be subject to a 5 per cent tax.
" The matter should be clarified fast as it can affect the property market," Deloitte KassimChan Tax Services Sdn Bhd Executive Director, Theresa Goh told Bernama today when asked to clarify on the confusion surrounding the RPGT proposal.
However, a former tax official, when contacted, said the RPGT is fixed at five per cent, irrespective of how long the property has been purchased under the 2010 budget proposal.
The official said that amendments to the relevant Act would be made before the Supply Bill (2010) is approved and gazetted by Parliament.
Under the 2010 Budget, the government proposed a fixed tax rate of 5 per cent imposed on gains from the disposal of real property effective January 1, 2010.
Goh said that people are worried now as they have only until December 31 to dispose their property before the tax takes effect in 2010.
Gains from the disposal of real property are subject to tax under the Real Property Gains Tax Act 1976 to curb speculative activities in the propoerty sector.
The rates of RPGT are progressive from zero per cent to 30 per cent depending on the holding period of the real property.
However, the RPGT has been exempted from April 1, 2007.
The RPGT was exempted in 2007 to help the property sector but during the recent regional and global economic slowdown it was not the right time to dispose as prices were not attractive.
But with the new propsal, she said that property owners might be forced to sell at less attractive prices to escape the five per cent RPGT.
-- BERNAMA
