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Tightening Measures Will Significantly Curb Property Speculation, Says Consultant
Rahim and Co managing director Choy Yue Kwong said the measures will help constraint speculators from using bank loans as a method of financing.
"The effect is slowly coming. The measures will have a significant impact on speculation, especially for speculators who depend on bank loans," he told reporters after the opening of the Seventh Malaysian Property Summit 2014 here Tuesday.
In the last few years, the central bank has implemented several tightening measures including loan assessment based on net income.
Choy said apart from tightening measures, another method to curtail speculation is through the implementation of the build-and-sell system, which makes developers more selective in accepting buyers compared to the current system with developers trying to sell as soon as possible to reduce the cost of holding.
Meanwhile, Choy said the implementation of the real property gains tax (RPGT) will have little effect in curbing speculative activity in the market.
He said the RPGT should have been introduced earlier when house prices were lower but appreciated at a faster pace and profit margins were higher.
At the moment, he said, housing prices have gone too high, squeezing profit margins, thus making the RPGT less significant.
However, Choy said any increase in RPGT rates should be gradual and monitored closely to prevent any negative impact on the market.
RPGT is a form of capital gains tax chargeable on gains arising from the disposal of real property.
Currently, the rates imposed in Malaysia are 30 per cent for properties disposed of in less than three years, and 20 per cent and 15 per cent for disposals within the holding period of up to four and five years respectively.
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