Developers have called on the government to review its property cooling measures to help stimulate the industry, which have a larger impact on the economy.
Developers noted that the various cooling measures rolled out by the government and Bank Negara Malaysia (BNM) left irreparable damage to the market. These included the changes in real property gains tax (RPGT), removal of Developer Interest Bearing Scheme (DIBS) as well as cubs on loan to value (LTV) ratio.
Notably, luxury housing projects or properties priced above RM800,000 saw slower take-up rates, while buyers contend with end-financing issues or loan rejections.
In fact, some RM10.08 billion worth of housing units, excluding serviced apartments, were left unsold as of Q1 2017, said the National Property Information Centre (Napic).
“The property industry has a larger multiplier effect than other industries, affecting more than 140 subsectors. Motivators in the 2018 Budget will help property developers and construction players, as well as encourage buyers, especially first-time home owners, to invest,” said Tan Sri Leong Hoy Kum, group managing director of Mah Sing Group Bhd.
With this, Leong urged the government to introduce more flexible schemes for private developers’ projects.
“At the moment, the flexible financing scheme is only exclusive for PR1MA’s projects. Such flexible schemes, if extended to private developers’ with projects where the houses are priced below RM500,000 and first-time home buyers will enable more buyers to own a home.”
The government could also offer a 10 percent to 20 percent tax relief on profit to encourage developers to construct more affordable homes, particularly in areas experiencing shortage of homes, he said.
Leong hopes the government would reduce compliance cost for developers, such as contributions for utilities, land conversion premiums, and developer charges.
And much like LBS Bina Group Bhd group managing director Tan Sri Lim Hock San, he also suggested expanding the stamp duty exemption to include properties priced below RM500,000 and to lower price threshold for foreign buyers.
“Compared with Hong Kong and Singapore, Malaysia’s property market is very domestically driven. In fact, foreign buyers in Malaysia are only between two percent and three percent. Therefore, we should promote more foreign investments in Malaysian properties as it would also has a multiplier effect in boosting the property industry as well as the nation’s economy,” explained Leong.
He also called for the increase of EPF account 2 percentage allocation – from the current 30 percent to 40 percent of EPF balances – to provide EPF contributors with more funds to pay for the downpayment of their property purchases, effectively reducing housing loan.
Lim, on the other hand, has proposed relaxing the terms in RPGT to encourage more people to invest or upgrade their homes, boosting property market activities.
He also called for the reduction of personal income tax rates as well as corporate tax.
“The additional margin in income can be used to ease the burden of the rakyat when purchasing their homes. Reducing the corporate tax will help to ease the burden of businesses, particularly developers,” he said.
“We are confident this will greatly benefit property developers who can then reinvest in the business, a move that can lead to improved productivity, increased job opportunities and increased quality and quantity of developments.”
Image sourced from NST.
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