Property tax let-off for owners

PUTRAJAYA: The real property gains tax (RPGT) announced during the Budget 2010 will only apply to properties sold within five years of their purchase, announced Datuk Seri Najib Tun Razak.

The Prime Minister said the 5% tax would now only be paid if the property was sold within five years of its purchase instead of the tax being imposed on the sale of property regardless how long its owners hold on to it as initially announced in the Budget.

He said the decision would see the Government forgoing revenue amounting to RM200mil, adding the move was made following requests by the Federation of Chinese Associations of Malaysia (Hua Zong) and the business sector.

“This policy was also decided upon as the Government wants to see stronger growth in the property sector next year. We are even willing to forgo a substantial revenue so that the sector can expand and grow.

“The property sector has shown signs of improvement but we feel that it requires further impetus so that it can continue to grow from strength to strength.

“We have met one of Hua Zong’s requests and we hope they will respond accordingly by working even closer with the Government in the future,” Najib said at the swearing-in ceremony of Hua Zong’s office bearers for the 2009-2011 term on Wednesday night.

Also present were Transport Minister Datuk Seri Ong Tee Keat, Health Minister Datuk Seri Liow Tiong Lai, Deputy Education Minister Datuk Dr Wee Ka Siong, Deputy Youth and Sports Minister Datuk Wee Jeck Seng and Hua Zong president Tan Sri Pheng Yin Huah.

Najib also announced that hotels undertaking additional investments to renovate, refurbish and expand their premises would enjoy a 60% re-investment allowance that has now been extended to 15 years from the previous 10 years.

He said this was an attempt to boost the country’s robust tourism industry, which has tremendous potential for further growth.

Najib also said that he wanted to see a more “active” private sector, which he said had been rather “lethargic” and had been more interested in investing abroad rather than domestically.