THE 2020 Budget is over. From the-man-on-the-street perspective, the greatest disappointment is the status quo on real property gains tax (RPGT).
The issue is the individual category, whereby any Malaysian who sells his own residential house is subject to five per cent RPGT after year five and above.
Statistically, it is unusual for one to speculate on any property pricing trend beyond the fifth year. We were taught in school that buying a property can be classified as a saving plan for old age.
Most of middle group of the population in their lifetime may have to dispose of the old residential house and acquire another house for various reasons. In view of this, I hope the government will abolish the five per cent RPGT tax.
The perpetual RPGT is seen as inflation for most middle class, especially on property below RM2 million.
Often, the two most common objectives to impose the RPGT perpetually is to either increase government revenue or curb property speculation. Obviously, the tax structure is to stop speculation and stabilise the property market.
The RPGT is effective to curb property market speculation, preventing the selling of the property in the early years.
For middle and lower end property, there shall be no RPGT after year 10 as it is very impossible for anyone to speculate on the residential house price aged 10 years old and above.
In conclusion, despite the fact that all Malaysians are entitled to one tax exemption in their lifetime, the fact remains that the RPGT should not become an inflation to the people.
CHOONG MEE FATT
Treasurer, American Universities Alumni Malaysia Association