Boost for property sector

Boost for property sector

PETALING JAYA: Real estate agents are optimistic that the Government’s move to abolish real property gains tax from April 1 will boost the industry.

Arboland Pacific Sdn Bhd managing director Gavin Tee said the abolition of the tax would create a dynamic and active market as property investment would soon have more people becoming involved in the industry.

“The immediate impact will be on the secondary market (medium to low-cost properties) where previously people would hold on to their property for at least two years before selling it due to the tax.

“With the abolition, the willingness of owners to sell their properties will be higher than the desire to buy ,” he said, adding that this will create a short-term buying and selling trend in the market.

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced at the Invest Malaysia 2007 conference yesterday that the Government would do away with the tax on April 1.

For the high-end market, Tee said the announcement would have a positive impact on the new development as more foreign investors would be attracted to invest in this sector.

However, he also warned investors to be more careful when investing as properties would now be treated as products to be traded and not just as assets.

“Individual investors will have to be more knowledgeable and skilful. The market will fluctuate with transactions expected to be more frequent,” he said.

Westmont S. A. Properties negotiator Alvin Wong said the announcement would encourage the growth of the real estate industry as sellers would no longer have to wait for five years to avoid being taxed.

“The market has become really slow since last year and I believe this is good news which will boost the sale of properties,” he said.

Reapfield Properties negotiator Eddy Tan said the new policy would encourage property owners and buyers to be more active in the market but it would not change the situation instantly.

“This is not a 0% down payment thing and people will still have to search for the right house before they can make any decision.

“For those who would like to invest in the industry, they will normally renovate the house first before reselling it,” he said.