THE Government has proposed to reimpose real property gains tax (RPGT) for gains arising from property disposal.
Based on the Finance Bill, disposal within two years of acquisition will be taxed 30%; in the third year, it will be 20%; in the fourth year 15%, while disposal within five years and beyond will still be subject to 5% tax.
The latest measure, which will come into effect in January next year, has been described as “a knock-out punch” by Deloitte Malaysia country tax leader, Ronnie Lim.
“It was merely four short sentences in the 2010 Budget speech. However, that short reference to RPGT carried a knock-out punch,” Lim said in a statement yesterday.
He pointed out that from the speech itself, many would have thought that a low rate of tax of 5% would apply to most gains arising from disposals of real property.
“Be prepared for a shock – this is not the case and the highest rate of RPGT will be 30%,” he said.
Most rates of RPGT from January 2010 will be restored to those prevailing immediately before its suspension in April 2007.