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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