Housing minister Abdul Rahman Dahlan told the news provider that current property tax levels are unable to stabilise house prices and values will continue to rise unless action is taken. "As far as I'm concerned, we're studying the possibility [of increasing RGPT] and if it can cool down the market, it would be on the table."
While Mr Dahlan failed to confirm if tax proposals will be included in the 2014 budget, a rise could be likely in the face of skyrocketing property values. The last time RGPT was increased in Malaysia was 2012, seeing the levy go from ten per cent to 15 per cent for properties sold within two years of purchase. Homes sold between two and five years also saw their RGPT increase from five per cent to ten per cent. However, the hike as been deemed as too weak to have any affect on house prices.
Keeping a lid on the Malaysian property market is proving to be a challenge. DTZ explained more scheduled housing launches will take place in the second half of 2013 to account for the lack of supply that drove prices upwards in Q2, but this is unlikely to be enough to restore balance. PPC International Sdn Bhd chief executive Siva Shanker told Business Week that values in the main cities will increase by ten per cent in 2013.
Tighter financial controls are also working to keep growth in check, with Bank Negra Malaysia recently announcing it will introduce maximum tenures for mortgage finance. This will prevent people from falling into debt but the impact on prices remains to be seen.