Real estate property gain tax

With the abolishment of real estate property gain tax by Malaysian government about one month ago, the real estate and housing industries is given a real boost indeed. Whether the abolishment will bring immediate positive effect in the industry is yet to be seen but at individual level, it definitely will affect the way people make decision with regard to property transaction. People buying property for investment will now find it easier to sell as they now are able to sell at lower price as they do not need to make provision for real property gain tax if they were to sell within the first few years after their purchase as the gain tax were the highest during the first few years. In essence, an investor can buy a property and immediately flip the property for a profit without subjecting to real property gain tax. The abolishment will also benefit housing developer as developer can expect increase in sale as more investors are expected to snap up property for fast profit as property can now be regarded as a product that can be traded.

Previously, property investors will wait a few years before contemplating selling their properties to lessen the effect of property gain tax on their profit as the tax was as high as 30% for the first year, now they can sell as soon as a buyer is available. The abolishment will undoubtedly increase the number of transaction in the real estate industry.