Summary of Budget 2014 – Malaysia Property

1. Review Real Property Gains Tax (RPGT).
 For gains on properties disposed within the holding period of up to 3 years, RPGT rate
is increased to 30%, whereas for disposals within the holding period up to 4 and 5
years, the rates are increased to 20% and 15%, respectively. For disposals made in the
sixth and subsequent years, no RPGT is imposed on citizens, whereas companies are
taxed at 5%.
 For non-citizens, RPGT is imposed at 30% on the gains from properties disposed
within the holding period of up to 5 years and for disposals in the sixth and subsequent
years, RPGT is imposed at 5%.

2. Increase the minimum price of property that can be purchased by foreigners from
MYR500,000 to MYR1,000,000.

3. Increase transparency in property sales price, where property developers will have to
display detailed sales price including all benefits and incentives offered to buyers such as
exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.

4. Prohibit developers from implementing projects that have features of Developer Interest
Bearing Scheme (DIBS), to prevent developers from incorporating interest rates on loans
in house prices during the construction period. Therefore, financial institutions are
prohibited from providing final funding for projects involved in the DIBS scheme.

Leave a Reply