A week ago, our local newspaper mentioned that our neighbour, Thailand has been in recession mode. The indicative way of measuring as yardstick is GDP(Gross Domestic Product). It was mentioned that the country has been twice consecutively performing below its GDP forecasted numbers.
On our home front, last week we saw the weakening of ringgit which is noted to be at its three-year-low against the greenback(US dollar). The ringgit lost as much as 0.4% to 3.272 per US dollar, it's weakest since June 2010 and predicts by analysts that ringgit could soften to 3.3 against greenback over the next six months. As at noon yesterday, ringgit had slid about 8.17% year-to-date against the greenback to 3.33 per dollar.
The Star newspaper article also mentioned that our students in UK and their parents are having to work harder to counter the weakening of ringgit as ringgit has also slid against the British pound, the euro and most major currencies.
On the contrary it was mentioned that it's not all bad news though as inbound tour operators and exporters are laughing their way to bank. Malaysian Association of Tour and Travel Agents(MATTA) vice-president (inbound) Tan Kok Liang said it would now be cheaper for foreigners to come to Malaysia with their increase spending power.
Federation of Malaysian Manufacturer(FMM) president Tan Sri Yong Poh Kon said Malaysian goods would be more competitively priced aboard. Exporters will benefit as they will earn a higher revenue for the same amount of goods sold previously.
Is Real Property Gains Tax (RPGT) in Malaysia in the rising trend? It seems to be happening. As we can see from the data on below, the RPGT rate has been increased progressively by government from 0% to 5%, 10% and 15%, in year 2010, 2012 and 2013, respectively. Will there be another incremental coming this Budget 2014 tabling?
RPGT was one of the government's initiative that had a big and immediate impact on curbing housing speculation.
In order to ensure the sustainable housing delivery system, the RPGT was reintroduced in 2010(see table below) to curb speculation and prevent the housing market from overheating.
However, reference to the House Price Index by National Property Information Centre(NAPIC) showed that in 2011 and 2012 the house price index recorded the highest increase for the last five years especially in Selangor, Kuala Lumpur, Penang, Pahang, Sabah, Perak and Terengganu.
Property flipper or short-term investor must be cautious on the rising RPGT. You may want to take (as per Real Property Gain Tax Act 1976) into your consideration, meaning 15% tax will be imposed on chargeable property gain for disposal within first two years as of year 2013.
Will there be property bubble or rather property correction moving forward? While we're in this conundrum, developers seem to do stockpile on their land bank.
Vulcan Salute: Live Long And Prosper
This article has been written by VULCAN INT'L Real Estate Research Institute http://www.vulcanresearch.blogspot.com for VULCAN INTERNATIONAL Real Estate Investors Club http://www.vulcaninternational.blogspot.com .
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