PETALING JAYA: The local
property sector may only see a real property gains tax (RPGT) increase in
Budget 2014, according to a report by Kenanga Research.
It said it was expecting
the tax rate to increase to 30% from 15% for properties sold within two years
and 15% from 10% for properties sold within three to four years.
It said the 10% rate would
remain unchanged for properties sold in the fifth year and zero RPGT for properties
sold in the sixth year onwards.
“We believe this has been
largely been discounted and priced-in somewhat, but we do expect some slight
knee-jerk reactions for a couple of weeks post announcement,” it said. Budget
2014 will be tabled on Oct 25.
Kenanga Research also said
the market could experience “panic buying” by investors next year if the goods
and services tax (GST) was implemented in 2015.
“Experience from other
countries had seen such trends in anticipation of future cost push inflations
on asset prices.
“This will benefit 2014 sales of developers as
financing terms for the primary market is more favourable compared with that of
the secondary market.
“We do expect developers to
front-load their launches in 2014 on the back of higher demand, which will be a
big booster to future earnings,” it said.
On the Johor property
market, Kenanga said the restriction on foreigners from buying secondary
properties from locals would be good for the rental market and new launches.
On the the 4% to 5% tax
rate of the sales price of all properties, it said was unlikely to slow down
demand from foreigners, especially Singaporeans, as properties in Singapore are
three times to five times more expensive than Johor.
On another note, Kenanga
said it did not expect the build-then-sell (BTS) model to be implemented in
Malaysia.
“The Malaysian economy is
not ready for a BTS model as many smaller developers will not be able to cope
with such a model while larger developers with strong financial positions will
likely price-in premiums of selling BTS properties.”
The Star, 9/10/2013
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