RPGT reversal a perfect Xmas gift to property mart

KUALA LUMPUR: The revision of the real property gains tax (RPGT) from the sale of property  regardless of the year of acquisition is the perfect Christmas gift to the property market.

ECM Libra Investment Research said the toning down by the government from its earlier proposal would provide a much-needed relief to the sector.

"It sends an affirmative signal that the government will adopt an accommodative stance to support growth in the property sector," it said in a research note here Dec 24.
Prime Minister Datuk Seri Najib Razak yesterday announced that the RPGT of five per cent would only apply to properties sold within five years of their purchase.

The government has re-introduced the RPGT during the 2010 Budget regardless of the year of acquisition with effect from Jan 1, 2010.

ECM Libra said sales of residential properties would remain strong as take-up rates increased for landed residential properties over the past weeks.

Super-link terraced houses, semi-detached houses and bungalows, which cater to the upper-middle class, continued to attract buyers, it said.

"Strong buying interest was due to the low interest rate environment as well as improving sentiment on brighter economic outlook.

"We believe buying interest to pick up pace especially among upgraders who need to sell their existing properties first," it said.

Meanwhile, OSK Research said the announcement was much fairer as it would no longer penalise genuine buyers who bought, or had bought, properties with the view of holding them for the long term.

However, the research house said the policy change would not bring about any significant change in the outlook of the real property sector.

It said the Klang Valley luxury condominiums segment was still due for a shakeout in first half next year, arising from another wave of supply that would swamp the luxury condo market in late 2009 and early 2010.

"When the new policy is implemented and the recent move by local banks to trim the mortgage spread will adversely affect sentiment and mildly curb demand, especially from speculators and short-term investors," it said.-- Bernama