In the recent announcement during Budget 2014, Real Property Gain Tax (RPGT) was raised. For properties held for 3 years or below prior to sale, a 30% RPGT is applicable. Properties held for 4 and 5 years prior to sale will attract 20% and 15% RPGT respectively. RPGT not applicable for properties sold after 6 years.
This in effect will help to curb the transactions by property speculators. REHDA (Real Estate & Housing Development Association) opined that the increase in RPGT will fuel further demand for new properties as current owners will need to hold on to their properties longer to avoid paying RPGT. This will reduce the number of properties put on the market by owners.
“While this raise in RPGT together with the banning of Developer Interest Bearing Scheme (DIBS) will curb speculative buying which is good for the market’s health, both will have minimal impact on HCK Capital Group. This is because of the investment packages offered by us are specifically designed for long term and serious investors”, said Irene Sim, Marketing Manager of HCK Property Division.
“We do not cater to speculative buyers. This is especially true with our PEP Invest scheme where guaranteed rental could last for up to 9 years. However, the banning of DIBS will affect some of our prospective buyers but this is well mitigated via other arrangements within our investment packages”, added Sim.