Reasons for the unsold properties
Published on: Friday, May 10, 2019
Text Size:
Minister of Housing and Local Government Hajah Zuraida Binti Kamaruddin said the government has taken steps to address issue of unsold homes and to boost homeownership among the people.
This includes exemption on stamp duty up to RM 300,000 for a period of two years till December 2020 on the Instrument of Transfer and loan agreement for the purchase of first homes worth up to RM 500,000.
She said the government has also announced an exemption on Sales and Services Tax (SST) on construction and building materials services, which led to the agreement by the Real Estate and Housing Developers Association Malaysia (Rehda) to cut house prices by 10 per cent for new projects that were not subjected to pricing control.
Additionally, Zuraida said the government through the Home Ownership Campaign (HOC) has introduced stamp duty exemption on the Instrument of Transfer for first homes priced between RM 300,001 and RM 1 million for a period of six months beginning January 1 this year.
“Through this campaign, developers will offer 10 per cent discount on existing residential units,” she said that in response to Senator Datuk Yong Wui Chung’s question on the strategies formulated by her ministry to address the overhang of residential property to ensure the people could afford to own their first homes during the Dewan Negara sitting here.
Yong also asked if the massive housing overhang was a result of financial institutions tightening its criteria for housing loan approval.
Meanwhile, Zuraida said the Real Property Gains Tax (RPGT) on profits gained from disposal of property and shares in real estate companies has been revised as a measure to curb escalating house prices. For companies and individuals who are non-citizens and non-permanent residents, the RPGT has been increased from five per cent to 10 per cent.
For Malaysian citizens and permanent residents, she said the RPGT has been increased from zero to five per cent.
“However, RPGT is exempted on real estate price, low-cost housing, medium-cost housing and affordable homes under RM 200,000.”
She added that the government has also raised the minimum threshold of home ownership for foreigners to RM 1 million per unit, as well as the requisition on developers to show transparent pricing of their properties in details including all benefits and incentives to buyers.
She said developers were also prohibited from practising the Developer Interest Bearing Scheme (DIBS) as their marketing strategy and were required to report bulk purchase of more than four units in a development by any individual or company.
She said the government has issued a guideline on Loan to Value (LTV) for the purchase of third home whereby the buyer could only obtain a maximum loan of 70 per cent.
On difficulty in securing bank loan, Zuraida said the Bank Negara Malaysia (BNM) under the Ministry of Finance has set up a RM 1 billion Fund for Affordable Homes to help low-income buyers to finance the purchase of their first homes.
She said the fund would allow eligible home buyers earning an income of RM 2,300 and below to obtain financing for their homes up to RM 150,000 from participating financial institutions such as AmBank, Bank Simpanan Nasional, CIMB Bank, Maybank and RHB Bank.
Besides that, she said the government has allowed property crowdfunding driven by the private sector as an alternative in first home ownership.
“In this regard, the FundMyHome initiative supervised by EdgeProp Sdn Bhd has been introduced whereby buyers pay a 20 per cent deposit of the house price while the remaining 80 per cent is funded by other investors.”
Zuraida added that the Ministry of Housing and Local Government would continue to implement existing housing financing schemes such as Rent to Own scheme, People’s Housing Programme (PPR), private affordable housing scheme and Housing Loan Scheme (SPP) to help the low-income group to own their first homes.
