Rehda president Ho Hon Sang said such an exemption would help the people own homes “instead of further limiting their options”.

Previously, an inheritance tax was believed to be among five new taxes proposed for the 2025 federal budget to be tabled on Oct 18. It would be levied on the assets or wealth inherited by beneficiaries after one’s death.

Over the weekend, however, transport minister Loke Siew Fook shot down claims the government was seeking to table an inheritance tax, saying it was never discussed in the Cabinet.

In a statement, Ho said the tax could see those inheriting properties selling off their ancestral homes as they cannot afford to pay the imposed tax, thus losing their homes and an investment kickstarted by their deceased family member(s).

Reintroducing the tax, which was abolished more than three decades ago, will only serve to discourage everyday Malaysians from purchasing homes as investments, he said.

The National House Buyers Association (HBA) had also voiced objection against the tax, saying it is unfair to property owners, especially those who have invested in real estate for their future generations.

HBA honorary secretary-general Chang Kim Loong said the tax might encourage people to spend rather than save, as it is “akin to punishing those who managed to succeed”.

He said property forms the largest component of wealth or estate of most people.