New Restriction to Sell A House

Restricting property owners to sell their properties within 10 years will not be so practical. I suggest the relevant government to classify certain type of properties as control properties and certain town areas as control areas. At the same time, all of the prospective buyers or owners must apply to ensure their are qualified to own those properties. This should be the better way to control the inflation.

What I mean as a restriction on the sale of properties with ownership of less than certain years is that we should have some kind of measures to make sure that property sellers do not get to profit from the activities of buying and selling properties for the sole aim of making a profit. In other words, we have to stop the property market speculation to curb the artificial inflation of property prices. But we have already had a real property gains tax (RPGT) introduced in 2012 that applies to property sold less than five years from its purchase. Property disposed off less than two years after purchase will incur RGPT of 10% while those sold between two and five years after will incur 5% RPGT. http://blog.intproperties.com/1098/update-on-the-malaysia-real-property-gain-taxrpgt-budget-2012/ So the new proposal of ownership of less than 10 years is just to extend the original 5 years to another 5 years that makes it 10 years in total. The RPGT does provide a RM10,000.00 exemption or 10% of the net gains, whichever is higher for an individual, so there is still profit to be made in there. The law just controls that gain within reasonable levels. Moreover, genuine property owner who disposes their property can apply for exemption of RPGT under the following circumstances ie. a) one-in-a-lifetime exemption for Malaysian individuals, b) disposal by way of gift ie between parent and child, husband and wife etc. I just hope that the measures are good enough to contend the high price trends of properties in Malaysia. Taking away the speculative factor, perhaps the real culprits for the steep rise in property prices are actually due to the high building material cost, transport cost, labor cost and the many other high costs that have also made our daily living expenses getting more and more expensive. We need more than just a few changes in government policies to combat the ills. We will need a big change in the policy makers itself.

Instead of restricting people from selling their properties within the 10 years, I shall propose the relevant government to allow only a person to own a type of property within a certain hot area. For instance, within the capital of Kuala Lumpur, a person is allowed to own a shoplot, a residential home and so on. Other than those areas which are not classified as hot areas, this restriction will not be applied. I believe my proposal will be more effective and more workable than restricting the property owners to sell their properties within 10 years.

The inflation of the property will be worse due to the high demand in the high demand market. When this new rule is implemented, there will be less available properties which are matured to be sold in the market at that time. Of course, with the limited available properties and high demand in the market, I am sure the cost of the property will be very much higher.

I do hope the relevant authority will consider about this matter when they really want to implement it. For me, the relevant authority must consider to allow those who have the financial problem to appeal for selling their properties within this restricted period.