Buyers of property in Malaysia urged to take long term view

  • 12 years ago
  • Uncategorized

People buying investment property
in Malaysia should take a long term view and avoid ‘flipping’ homes for the
good of the country’s property market. That’s the view of the Real Estate and
Housing Developers Association of Malaysia (REHDA) who believe that too much
speculation is damaging the country’s property market.

The comments come after
widespread complaints that speculators or ‘flippers’ have been responsible for
pushing up property prices in urban areas, crowding out genuine homeowners and
investors. Keep reading to find out more.

Property is ‘a long term investment’

Datuk Ng Seing Liong, REHDA’s
past president, said: “We, as developers, we also don’t want them (speculators)
to come and buy to flip. Too much speculation is no good. We want a long-term
and sustainable market.”

“Don’t rush into property,” he
said. “It is a long-term investment.”

Recent government intervention
has attempted to discourage the ‘flipping’ of property. Real property gains tax
(PRGT) has been raised twice in the last two budgets after having previously
been abolished in 2007.

This year, the RPGT was raised
from 10 to 15 per cent for properties sold within two years and from five to 10
per cent for properties sold between two and five years from time of purchase.
There is no RPGT levied on properties that are sold after five years.

REHDA treasurer N.K. Tong said he
did not expect a severe impact from the RGPT increase as it would not affect
long-term investors.

“We want people to take a
long-term view of property investment,” he said.

However, The Malaysian Insider called the recent RPGT rise ‘feeble’ and
believes it will not deter property speculators. This is mainly because
investors buy new properties off plan and sell them after construction is
completed two years later – thus avoiding the highest RPGT tax rate.

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