REAL PROPERTY GAINS TAX: Impose tax only on speculators

2009/11/09

K.R. , Kuala Lumpur

I HAVE no complaints about the 2010 Budget, except that it seems to lack concern for the well-being of senior citizens.

A newspaper report recently quoted a tax consultant at a seminar on the Budget as saying that "we should be thankful that the real property gains tax was capped at five per cent and not higher and that with the capital appreciation (of the local property sector) the five per cent tax is a small price to pay".

I am a retired professional from the private sector who has none of the benefits retired government servants enjoy.

I am also a heart patient under expensive medical treatment and medication. I intend to use my EPF savings for all my expenses.

Fortunately, I have a double-storey link house that I bought 24 years ago.

At the back of my mind was always the comforting thought that I could rely on the proceeds of the sale of this house to see my wife and me through the remaining years of our lives since the capital appreciation of this property is substantial.

And now I will be taxed on the capital appreciation, irrespective of the fact that I have held the property for more than five years. According to some, this is a small price to pay.

That is cold comfort for people like me.

If the intention is to tax speculators, this is not the right way to go about it.

I have come across product launches where speculators grab prime units even before they are open for sale to the public, in the hope of making a quick profit when sales are open.

This is what the tax should be aimed at, not genuine investors who invested their savings and hoped to liquidate these investments in their twilight years to survive.

A minister has made a statement recently suggesting the tax could be reviewed. I sincerely hope so.