8/12/2019 Budget 2014 Property Tax Changes

http://slidepdf.com/reader/full/budget-2014-property-tax-changes 1/2

8/12/2019 Budget 2014 Property Tax Changes

http://slidepdf.com/reader/full/budget-2014-property-tax-changes 2/2

COVER STORY   3

(from previous page)

This means that it is still viable to disposethe property in Malaysia and still reap

some prot whereas it is a loss-making

proposition to do so in Singapore.

The government has also abolished the

Developer Interest Bearing Scheme

(DIBS) to restrain the developers from

including the interest payment during

construction in the house price. All

institutions are also forbidden to give

any end financing for DIBS projects.

During the Budget 2014, the government

introduced a new taxation rate which will

replace the current sales tax and servicetax with Goods and Service Tax (GST).

The GST rate will be at 6% eective 1

April 2015. On a good note, GST will not

be imposed on the sale, purchase and

rental of residential properties.

We could conclude that the latest budget

tabled by the Prime Minister are deemed

necessary to ensure stability in the

property market and give sucient

leverage for the market to rebalance

itself to prevent property bubbles from

happening in the near future. Despitethe doubling of RPGT, Malaysia is still

comparatively attractive to foreign

investors as the rates are lower compared

with Hong Kong and Singapore. While

we may see a slowdown in foreign

property buyers buying local properties,

the revised RPGT is less likely to leave

a long term or deep negative impact as

Malaysian property remain relatively

competitive and of high quality in the

region.

Table 3: Real Property Gain Tax Comparison Table

Singapore Malaysia

Price in 2013 SGD 1.0million RM2.5 million

Price in 2014 SGD 1.05million RM2.65 million

Capital appreciation SGD 50,000 RM125,000

SSD/RPGT @ 1st year SSD@16% RPGT@30%

Payable SSD/RPGTSGD 168,000

(RM 420,000)RM37,500

Capital Gains minus taxes accruing to owner of property Net Loss of SGD 118,000 Net Gains for RM 87,500

Source: MPI Research