For a moment, I thought I could celebrate with AXREIT when I checked it at 1.93 Well, too bad that we could see some pressure on REITs come next week due to the unwelcomed return of RPGT.

Yes, it could hampen the properties sector across, but think longer term, RPGT is not a totally bad thing (after all 5% is not too bad either), it can prevent over-speculation in the properties market and potential creating bubble on properties, or people abuse the non-RPGT environment to do some 'creating' accounting side.

How will re-introduction of RPGT prevent such over-speculation?

I welcome RPGT, the property market is too boiled.

Is yearly revaluation of property asset = property gains?

Revaluation of property = Unrealised gain
The RPGT is based on only Realised gain.

A lot of people (especially on medium to high end properties) bought properties for the sake making money.

I personally encounter (not me buying, I rather buy reit instead of personal own ) a high sort properties that launching time was 395K (or 400K), now transaction is going on around 600-650K+ just after 2-3 years time period (properties completed).

So with RPGT introduced back, it makes people think twice about speculation on it although RPGT is never a hinder point for people to buy properties.

Over-speculation is never good for properties market on long term basic, although short term wise properties price can shoot up and people can make a lot of money, over-speculation can lead to crisis and properties slump for long period of time, US real estate bubble is the best example.

I'm on the record on this forum as being a supporter of capital gains taxes and since this RPGT is in effect a form of capital gains tax, I heartily support it. Note that I have a significant amount invested in REITs but I still support it because:

1) Like Cherroy, I believe that curbing short-term speculation is good for the long-term health of the economy.
2) I believe that it is the socially just thing to do.

I only wish that something similar could be implemented on shares. That should really thin the ranks of the day traders and make sure that only long-term investors are in on the ride. I'd imagine it would make the market less volatile as well.

If such tax implented will lead to the demise of share market, there will be no free market already. Short term speculators make the market active and attractive, no one will come in when no short hot money can be made. The same thing goes to REITs, the price is so flat thus is boring from some's point of view. The is one of the reason why very few player in REITs. I certainly hope that will not happen in stock market.

I wish the reimpose of RPGT will attract more REITs investors.

Ah thank you for the clear explanation tai kor

I would think that those who bought the property are entitled to the returns from their "risks" that they undertake. To me, the tax just add another variable to their equation of speculation as speculators will still be speculators.

Also, would we see discounts as the market becomes a seller market as many people tries to sell to avoid the tax ? If this is the case, then I will be on the lookout for bargains

Yes of course for short-term, it's going to hurt the price a little. But educated investors like us knows what's best for ourselves, and that REITs do not transact properties frequently. We invest in REITs for the passive income, so there is no need to worry about RPGT.

Too many people got away flipping properties since without paying taxes.

The best units are always taken before official launch.

Developer prices of new units are always higher than secondary prices of old units.

Kinitos,

"Developer prices of new units are always higher than secondary prices of old units"
I think you meant the other way around. New developments are always cheaper.

By the way, you're going out of topic already

Start next monday. All property increase 5% due to gov intro 5% tax.

RPGT at flat rate of 5% probably won't affect the REITs much but I don't think properties will increase by 5% because RPGT only applies to the gain on disposal not the value of the entire property.

This post has been edited by ProComplex: Oct 25 2009, 11:42 PM

Also.. this taxable capital gain is less renovation/refurbishment costs.

5130 ATRIUM ATRIUM REITS
3rd Interim Income Distribution 2.20 Sen

Entitlement Details:
Third interim income distribution of 2.20 sen per unit in respect of the three
month period from 1 July 2009 to 30 September 2009.


Entitlement Type: Income Distribution
Entitlement Date and Time: 13/11/2009 05:00 PM
Year Ending/Period Ending/Ended Date: 31/12/2009
EX Date: 11/11/2009
To SCANS Date:
Payment Date: 30/11/2009

Finally, 2.2sen

Great news for those who stuck by ATRIUM despite the CEVA crisis.