THE IMPACT OF REAL PROPERTY GAINS TAX (RPGT) EXEMPTION IN REAL ESTATE SECONDARY MARKET - A MALAYSIAN CASE STUDY

Abdullah Khuzaimah

ERES from European Real Estate Society (ERES)

Abstract: The first legislation to tax gains from the disposal of real estate was by the enactment of Land Speculation Tax Act 1974 which came into force on December 6, 1973. It was later replaced by Real Property Gains Tax Act 1976 from November 7, 1975. The Act was introduced to curb speculative activities in properties as such activities were rampant and has triggered artificial market demand in the real estate. Since its inception, the RPGT rate has been exempted twice and revised seven times. In March 2007, Prime Minister announced the exemption of RPGT with effect from April 1, 2007. The exemption was intended to ìinject more excitement and dynamism into both the property and the financial sectorsî in boosting the economic activities. The RPGT exemption however was restored in January 1, 2010. This paper examines the impact of RPGT exemption from April 1, 2007 ñ December 31, 2009 and reports on the real estate market condition during the exemption period. This study uses transaction data from National Property Information Centre (NAPIC) for the period of 2002 ñ 2009.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2010-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2010_340

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