He also revealed that the government had currently no plans of abolishing the tax on disposal of properties held for more than five years, as it has only been implemented for less than a year (becoming effective on 1 January), reported Bernama.
“However, the government will look at the effectiveness of the RPGT imposition and the performance of the property market as a whole,” he said in response to a query during the special chambers in the Dewan Rakyat.
Beginning 1 January 2019, permanent residents and individual citizens must pay tax on chargeable gains from shares and properties disposed after the fifth year of ownership. Before that, no RPGT was imposed on transactions completed from the fifth year onwards.
Amiruddin explained the RPGT imposed on chargeable gains for properties disposed of from the sixth year onwards enlarged the tax base and lessened speculative activities that placed pressure on housing prices.
“In the 2020 Budget, the government has improved the RPGT treatment for the disposal of properties after the fifth year by re-setting the base year to determine market value from 1 January 2000, to 1 January 2013. This means that the market value in 2013 would be used even for properties acquired prior to that year,” he noted.
He added that because the market value for 2013 would be bigger compared to that in 2000, the tax imposed on Malaysians and permanent residents would thus be lower and stop becoming a burden.
“By using 2013 as the base year, the government would be getting a slightly lower revenue by imposing RGPT after the five-year period, compared to the current treatment,” Amiruddin explained.