With RM40 billion worth of property overhang in residential and serviced apartment units still needing to be cleared out, the government should extend the Home Ownership Campaign (HOC) until the end of this year to help Malaysia’s property sector recover, said former Finance Minister Lim Guan Eng.
Lim, who is DAP’s Member of Parliament for Bagan, noted that the HOC also benefitted homebuyers through the stamp duty waivers and discounts, reported Malay Mail.
Housing and Local Government Minister Datuk Zuraida Kamaruddin said it is important for the HOC to be extended until year-end as it will help the economy recover, while assisting Malaysians to own a home.
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However, the Ministry of Finance refused to extend the drive – which is set to end on 31 May – saying that doing so would mean foregoing RM500 million in stamp duty revenue, according to the Malay Mail report.
Launched in 2019, the HOC generated a total sales of RM23.2 billion in 2019, exceeding the RM17 billion initial target set by the then Pakatan Harapan government.
Under this programme, developers are required to provide buyers with a 10% minimum discount. Buyers also enjoy stamp duty waivers on the Memorandum of Transfer (MOT) and Loan Agreements for properties priced above RM300,000 and below RM2.5 million.
During his time as finance minister, Lim was one of the major figures that pushed for the campaign.
The DAP leader believes the latest HOC will generate about RM36 billion in sales by the end of May, which is enough to outweigh any potential loss from stamp duty revenue.
“Although there could be a potential loss of stamp duty revenue of some RM500 million, this amount could be recouped by corporate taxes on profits earned by developers on the aforesaid RM36 billion or more sales revenue,” he said as quoted by Malay Mail.
“At a conservative 10% profit on the RM36 billion revenue, it would mean 24% corporate taxes on the RM3.6 billion of profit of around RM864 million,” added Lim.
The former minister said one should “not be penny wise, pound foolish” given that the property industry has “many positive economic spillovers and benefits”.
He added that the forecasted RM36 billion in sales revenue for the HOC could help spur the country’s economy by catering to demand for property-related activities and services.
“Developers will also be able to pay their staff salaries and repay loans leading to increased lending. All these economic activities will generate profits and income that lead to more taxes collected,” said Lim.
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