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The Finance Ministry, and not the Penang government, is ultimately responsible to provide policy responses to the soaring prices of property in Penang over the last five years…

June 9, 2012
Act on high Penang property prices, finance minister told
  • Susan Loone
  • 4:23PM Jun 8, 2012

The Finance Ministry, and not the Penang government, is ultimately responsible to provide policy responses to the soaring prices of property in Penang over the last five years, said a DAP parliamentarian today.

NONEDAP Bukit Bendera MP Liew Chin Tong (left) said the Finance Ministry has the policy tools, such as real property gains tax (RPGT) and stringent loan requirements needed to change the situation.

He added that house prices have increased significantly over the past five years in Kuala Lumpur, Penang and Johor.

“The soaring prices are driven by market forces, and have burdened the Malaysian middle-class, especially young families, as well as those in the lower income bracket,” said Liew.

“Pakatan Rakyat is fully aware of the challenges faced by first home buyers and have been working hard on solutions within our remits of power and jurisdiction to address the issue,” he added.

However, Liew said in April, Deputy Finance Minister Donald Lim had told a news portal that an average increase in house prices of 10-15 percent per annum is healthy as compared to fixed deposits in banks.

He added that Lim had even said that for areas like Kuala Lumpur, a 20 percent increase is quite acceptable.

“If this is the view of the finance minister, no wonder house prices are increasing,” Liew told a press conference in Penang today.

‘Revise real property gains tax’

Liew was responding to a front-page report in The Star yesterday which claimed that residential property prices have soared by more than 25 percent over the last five years on Penang island.

The report stated that condominiums are priced as high as RM450,000 to RM550,000 now compared to RM300,000 to RM450,000 in 2007.

NONETerrace and semi-detached houses are priced between RM625,000 to RM1 million currently, compared to RM450,000 to RM550,000 in 2007.

Liew held the press event together with state executive councillors Chow Kon Yeow (left) and Wong Hon Wai. Chow is state DAP chief, while Wong is the Air Itam assemblyperson.

Liew said one of the measures to curb speculative real estate activities in the property sector as announced by the federal government in its 2012 Budget last year is the revision of RPGT.

He added that properties held and disposed of after five years are not subject to RPGT.

On what rate would he suggest the RPGT to be, Liew said he wants to hear what the Finance Ministry has to say about it.

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