The Government will review the Real Property Gains Tax (RPGT), as well as prohibiting developers from implementing projects with Developer Interest Bearing Scheme (DIBS).
During the tabling of the Budget 2014, Prime Minister Datuk Seri Najib Tun Razaksaid that for gains on properties disposed within the holding period of up to three years, the RPGT rate is increased to 30%; whereas for disposals within the holding period up to four and five years, the rates are increased to 20% and 15% each.
For disposals made in the sixth and subsequent years, he said no RPGT would be imposed on citizens, whereas companies are taxed at 5%.
For non-citizens, Najib said RPGT would imposed at 30% on the gains from properties disposed within the holding period of up to five years, and disposals in the sixth and subsequent years, RPGT is imposed at 5%.
Najib also proposed to increase the minimum price of property that could be purchased by foreigners from RM500,000 to RM1mil.
He said property developers will have to display detailed sales price including all benefits and incentives offered to buyers such as exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.
He said the Government would also prohibit developers from implementing projects with DIBS features, to prevent developers from incorporating interest rates on loans in house prices during the construction period.
“Therefore, financial institutions are prohibited from providing final funding for projects involved in the DIBS scheme,” he said.