21 November 2009

A waiver good for some property owners. Petikan TheStar Sunday November 1, 2009

THE reintroduction of the Real Property Gains Tax (RPGT) in Budget 2010 has generated much interest and concern.

The acquisition and disposal of property is subjected to a levy by the Government in the form of stamp duty or RPGT

There are many instances when the disposals are made not with a view to profits. People acquire and hold property as a store of wealth and they dispose it when they are in need of funds.

Certain individuals should be exempted from the RGPT. Senior citizens aged 55 years and above who dispose of their properties should be exempted. This category of people needs the funds to meet exorbitant medical bills and for their continued healthcare.

Those who are forced to sell property to meet their debts should be exempted; and disposals as a result of bank foreclosures should also be exempted.

There are those who have to sell their properties to finance their children’s education. The incidence of a levy on property transactions should be a one-off payment at the time of acquisition. Therefore, an increase of a quarter to half a percentage point of the stamp duty could be introduced.

I believe this increase will be adequate to generate revenue equivalent to that derived from the RPGT collection.

Those who can afford to buy property or buy new houses should be able to pay the stamp duty. Stamp duty is easy to compute as it is based on the transacted price. On the other hand, the chargeable gain with the acquisition and disposal price is sometimes difficult to ascertain since the supporting invoices, bills and other documents go missing after so many years.

Other benefits include:

> There is no need to complete any forms and hence saves time.

> The collection is prompt as there would be no registration of the title of the property without first receiving the stamp duty.

> The seller receives his proceeds without having to wait for the tax clearance.

Shah Alam.

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