Malaysia To Abolish Real Property Gains Tax?

The past few days there were a spate of rumours in Malayaia on speculation that the Government may abolish Malaysia's Real Property Gains Tax (RPGT) in order to strengthen Malaysia's present soft property market and the situation of property supply overhang. My unconfirmed sources indeed revealed that the Prime Minister of Malaysia, Datuk Seri Abdullah Badawi, has agreed to abolish Real Property Gains Tax effective 1st April this year! If this source of information is true, this will be a major boost for property markets in Malaysia, long seen as a laggard in property prices in the Asia region. Indeed, Malaysia's capital, Kuala Lumpur offers one of the cheapest properties in terms of valuation among the major cities in Asia, including Bangkok and Singapore. In addition, Malaysia is also heavily promoting a new economic zone (named as Iskandar Development Region) located in the southern part of Malaysia, i.e., the state of Johor, which is located just above Singapore, as the next center of economic and property growth, very much like the Shenzhen of China.

Which segment of the property market stands to benefit the most? I believe this will be the mid to high-end property segment. So for those who are on the lookout for good investment, watch out this segment of the market or alternatively (especially for those who do not have so much capital on hand), you may invest in fundamentally sound property stocks in the Kuala Lumpur Stock Exchange or invest in Real Estates Invest Trust (REIT). The trading nature of REIT behaves the same way as stocks and best of all, it allows you the chance to own not just one property but a portfolio of high investment yield properties without having to break your Bank Account or subject yourself heavily in debt! In another post, I shall discuss more about the benefits of REITs. Stay tuned!