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Monday, October 26, 2009

Tax plan spurs new property listings: Website

The government's move to re-introduce Real Property Gains Tax (RPGT) from Jan 1 next year seems to have spurred some borderline sellers to put up their properties on the market, according to

The move has also encouraged others to reduce their prices to make sure they sell before the end of this year, the property website said in a statement today. said it saw an unusually high number of new property listings over the weekend as well as an unusually high number of listings where the price had been reduced from an earlier stated price.

Its chief executive officer Asim Qureshi said the re-introduction of the tax will play in important role in stamping out speculative investments in property.
"Speculations in property markets have caused the boom and bust cycles we have seen in many other real estate markets across the world and avoiding that kind of instability would be a positive," Qureshi said.

"However, while we have seen a surge in confidence in the property market in recent months, I cannot help but feel the re-introduction of the tax has been a year or two too soon," he said.

Qureshi said that having a tax exemption if the property was held for a certain number of years would have been better as the tax would have been more targeted at property speculators.

"One concern I do have is the message that this move will send out to foreign investors. Malaysia is increasingly being seen as an international property hotspot, and the re-introduction of the tax will somewhat undermine that view," he said.

"There is a big difference between 100 per cent tax-free property gains, which jurisdictions like the United Kingdom, the United Arab Emirates, Singapore and Hong Kong offer and a low rate of tax of five per cent."

On a positive note, Qureshi said the rate of tax was only five per cent of the gains, adding that the government has done the right thing by re-introducing the tax gently so as not to significantly disrupt the market.

"In terms of opportunity, I believe it will be a good time to buy in the secondary market from now until year-end, which is where the tax will have its most direct impact," he said.

"A lot of property owners will want to sell their properties before the deadline which means more supply, yet in the backdrop we have increasing confidence in the Malaysian property market and the country's strong economic fundamentals.", launched in October 2007, is owned by Think Media Sdn Bhd. The website has over 20,000 members and a rapidly growing database of over 70,000 quality property listings.

By Bernama

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