Property Expert Cautions Govt Against Taxing Long-Time Owners Who Sell Their Homes
A senior chartered property surveyor has urged the government to exempt senior citizens from the real property gains tax (RPGT), saying it is not fair to burden them with the tax when they decide to sell their long-held properties.
Ernest Cheong, who has over 40 years of experience in the property market, said there is no reason for the government to tax these home owners.
“They sell off their houses out of necessity and for reasons that we may not know.
“Owning and keeping a property for 20 years and above is considered as another form of retirement savings for some people, and the government should not penalise these senior citizen owners,” he told FMT.
Starting this year, property owners must pay 5% of the profit they make from selling their properties after holding them for five years and beyond.
Foreigners have to pay 10% of their profit.
Previously, RPGT was zero-rated for house owners who sell their properties after five years.
RPGT is a tiered tax that ranges from 30% to 15% for properties that are sold between the first and fifth year of purchase.
The tax was introduced in the 1970s to prevent speculators from buying and selling in a short period, which would have pushed up prices.
The 5% RGPT rate was revised in the 2019 Budget, a decision which did not go down well with house buyers’ interest groups.
National House Buyers Association (HBA) honorary secretary-general Chang Kim Loong said they had appealed to the government to reconsider taxing sellers on their properties beyond five years.
Meanwhile, Cheong dismissed a suggestion by a Sarawak property developers’ group to impose a zero-rated RPGT on Malaysians and permanent residents when they sell their properties.
“We must pay tax because without taxes, how can Mr Lim Guan Eng run the country?” he said, referring to the finance minister.
“We may end up borrowing more from other countries to plug our national debt,” he said.
Cheong reminded that RPGT was targeted at speculators and not genuine home owners.
“What would ever happen to our property prices if RPGT is zero-rated? Can someone with RM4,000 be able to buy a house in his life?” Cheong asked.