In a post-budget commentary on Saturday, James Wong, the publicity chairman of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS), said the proposals, along with macro-prudential measures taken by Bank Negara, would stabilise and strengthen the market.
The proposed establishment of a National Housing Council and the provision of RM1bil in a public-private partnership to boost the affordable housing sector was much needed as previous measures were ineffective, Wong said.
“The affordable housing model has to be tweaked to include pre-fab housing, releasing more land by government agencies and increasing urban area density, particularly in places near transport terminals in order to average out land cost,” he said.
“It is not that private developers do not want to build affordable housing. Land prices have gone up too high in the Klang Valley, Penang and southern Johor. It is impossible for private developers to build homes priced between RM150,000 and RM450,000 in urban centres.
On the 30% tax on gains within the first three years of disposal in the proposed real property gains tax (RPGT) effective Jan 1, 2014, Wong said such measures in previous budgets for 2012 and 2013 were ineffective as an anti-speculation tool. The latest move would give RPGT more bite, he said.
“The budget promotes properties as a long-term investment, not something to be flipped to make short-term gains,” he said.
The Budget 2014 review of the RPGT has extended the quantum of increase from 15% within the first two years of disposal to 30% within the first three years of disposal. It has also re-imposed a prevailing 5% tax on companies and non-citizens in the sixth and subsequent years.
The new RPGT, and the removal of developers interest bearing scheme (DIBS) which enable buyers to pay a 5% or 10% downpayment with mortgage payments kicking in until the property is completed, would also stamp out bulk buying by foreigners, Wong said.
Although this would affect Iskandar Malaysia in southern Johor, over time the proposed measures would bring about confidence into that market as there had been “too much hype and speculation going on there”, he said.
