Wednesday 24 Apr 2024
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This article first appeared in City & Country, The Edge Malaysia Weekly on November 8, 2021 - November 14, 2021

Property industry associations and consultants had anticipated more direct measures in the RM332.1 billion Budget 2022 tabled in parliament to stimulate the lacklustre and distressed real estate market, after almost two years of the Covid-19 pandemic. While measures to stimulate homeownership among the B40 (bottom 40% income group) are commendable, implementation is key, they say. More incentives for green, sustainable buildings were also expected but failed to materialise. City & Country asks industry players for their views on the federal budget.

Real Estate and Housing 

Developers’ Association 

Malaysia (Rehda) 


Datuk Soam Heng Choon

We are appreciative that the government has taken into account our proposal to abolish the Real Property Gains Tax (RPGT) on homes disposed of from the sixth year by Malaysians and permanent residents in the country. The RPGT was initially introduced to curb speculation but, in the current soft market conditions, we welcome its removal. We hope this measure will help invigorate our property market and eventually translate into a positive multiplier effect on the economy.

We echo the government’s sentiment on the necessity of homes for all individuals, especially the B40. The further allocation of RM1.5 billion to continue with housing programmes such as the development of Rumah Mesra Rakyat and maintenance of public housing units is a step in the right direction. Similarly, the RM2 billion guarantees given to banks through the Guaranteed Credit Housing Scheme (Skim Jaminan Kredit Perumahan) to assist those in the gig economy and the like is another welcome move. It is hoped that this will encourage more home purchases.

While we appreciate the efforts made and consideration taken by the government to prepare for an all-inclusive and balanced Budget 2022, we were hopeful for other positive measures towards a faster recovery of the property market.

Malaysian Institute of Estate Agents (MIEA) 


Chan Ai Cheng

The proposed budget did not [fulfil hopes of] providing the stimulus to revitalise the property market. As real estate agents, we did not envisage this and it did not meet our expectations of stabilising the real estate sector,

especially in the secondary market, in a challenging market.

The introduction of the Housing Loan Guarantee Scheme is a laudable move, as financing has always been a struggle for this group. Assistance and support should have been given to the M40 [middle 40% income] group, which has been left out — it is the mid segment of the property market, which plays a critical role in the purchase of new properties and in the secondary market.

Perhaps a loan moratorium or interest-only loan payments that need not be presented in the country’s budget should be given serious consideration.

The extension of the removal of RPGT from the sixth year should also be coupled with a stimulus for purchase to form a formidable impact on the property market.

International Real Estate 

Federation (Fiabci) Malaysia president 

Datuk Seri Koe Peng Kang

It was heartening to see that the abolishment of RPGT from the fifth year was tabled, albeit taking effect only from the sixth year. The secondary market contributes more than 80% of total residential property transactions and the removal of this tax would help spur the subsale economy and trigger more demand down the supply chain.

We also commend the government’s efforts and focus on tackling climate change. It would be even better if such incentives were extended to the property development industry, where tax relief and incentives are offered to property developers that are serious about driving this agenda across its developments and not merely green-washing.

The government can explore expanding the green incentives through the possibility of reducing developers’ costs, which will translate into lower property prices and cost savings for buyers. This can be achieved by reducing labour and compliance costs, reducing company income tax and providing tax incentives for projects with environmental, social and corporate governance (ESG) goals, initiatives/green buildings or projects built with the Industrialised Building System (IBS).

Malaysian Association of Hotels president 

Datuk N Subramaniam

The tourism industry is appreciative that the government has extended the targeted wage subsidy programme and exemption of tourism tax. As for the personal income tax relief for domestic travel, the industry had proposed for the amount to be increased to RM5,000. We also requested an extension of the service tax exemption but this was not announced, and we hope the government will reconsider it to boost tourism recovery.

Various funds announced for the upkeep and upgrade of tourism infrastructure as well as those specifically for budget hotels would contribute to the rebuilding of the tourism industry’s competitiveness. We are also looking forward to more details on the Penjana Tourism Financing and BPMB Rehabilitation Scheme, which could be beneficial to stakeholders if made accessible at low or even zero interest.

Grants and promotional funding introduced to encourage tourism, arts and culture as well as tax incentives for events are much welcomed. The government has taken into consideration the issue raised by the industry about entertainment tax, and the announced exemption in all federal territories will not only benefit operators, particularly theme parks, but also the people. We hope the state governments will follow suit.

Master Builders Association Malaysia (MBAM) 


Tan Sri Sufri Mhd Zin

The construction projects announced are insufficient for the industry at large. These are mostly smaller-scale projects to enhance the infrastructure for public use, which would benefit part of the industry, mainly the G1 to G4 categories of contractors.

MBAM is supportive of the announcement about upskilling local talents through the continuation of the Technical and Vocational Education and Training programme. We sincerely hope this initiative will provide the industry with more local talent to overcome the shortage of foreign workers.

Generally, MBAM was expecting a more uplifting Budget 2022 announcement for the construction industry. Disappointingly, there was no announcement of new mega infrastructure projects to pump the revival of the Malaysian construction industry. MBAM appeals to the government to provide more assistance to the construction industry to revive and sustain the sector.

Knight Frank Malaysia 

deputy managing director 

Keith Ooi

The abolition of the RPGT for property disposals in the sixth and subsequent years of ownership is long awaited. The exemption from the tax penalty is expected to boost activity, especially in the secondary market.

Another notable property-related highlight in Budget 2022 is the RM2 billion allocation under the Housing Credit Guarantee Scheme to help gig workers and small traders without steady income apply for a mortgage loan. This measure is deemed timely as the livelihoods of many, especially those in the B40 segment, have been negatively affected by this prolonged pandemic.

The tax relief of RM50,000 for companies registered under the Safe@Work programme and the maximum subsidy of RM300,000 for companies to improve workplace seating and air circulation are good initiatives to ensure the rakyat’s safety, following the reopening of the economy under the National Recovery Plan. Landlords who provide businesses with rental discounts will also be granted tax relief.

The allocations for infrastructure developments and to narrow the development gaps between urban and suburban areas are expected to create spillover effects in the property market. More direct measures may be required, however, to revitalise and sustain the slow growth momentum of the property sector.


group managing director 

Foo Gee Jen

The RPGT exemption will encourage more families to upgrade from their existing smaller homes. We would have liked to have seen a stamp duty exemption being given for RM300,000 of the sales consideration, so that more money would end up in the pockets of the upgraders for their next purchase.

For the hotel industry, the wage subsidy programme is focused on players in the tourism industry, for those who received a decline in income of at least 30%. The total budget allocation of RM600 million will benefit more than 26,000 employers and 330,000 employees.

For the property sector, we see [nothing exciting about] the Budget since there are no ground-breaking initiatives planned for next year. Though we would have hoped to have seen more sustainable efforts in the real estate industry, such as investments in solar panels and green technology for safer homes, there is still much the industry can reap from this announcement as we prepare for a seamless move into Industrial Revolution 4.0.

PPC International 

managing director 

Datuk Siders Sittampalam

There is nothing really exciting for the property sector. The RPGT exemption is a long-awaited measure, something we thought the government would remove in the last Budget. It is better late than never and will improve market sentiment.

The RM2 billion allocation for the Housing Credit Guarantee Scheme will enable more people to buy property. I have my doubts about the allocation for low-cost housing because many similar allocations have not met the targets. It is a good idea; the question is implementation.

A lot more could have been done for the property industry because it has been badly hit by the pandemic. We thought we could have had a little more boost from the Budget but, unfortunately, there is not much, and it is a bit of a disappointment — for example, the Home Ownership Campaign. Also, a lot could be done with regard to stamp duty to help increase sales volume.

Henry Butcher Malaysia 

chief operating officer 

Tang Chee Meng

The allocation of RM1.5 billion for low-cost housing will help many in the lower-income groups achieve their dream of owning a home. The successful and timely implementation of the programme is key to fulfilling this social obligation of the government.

The removal of the RPGT from the sixth year augurs well for the sector as it could stimulate transactions in the secondary market and encourage house purchases in the primary market.

More people have got involved in the gig economy after losing their regular jobs and the allocation of RM2 billion under the credit guarantee scheme will enable them to secure a housing loan.

The allocation of RM1.6 billion for the tourism industry would help in the recovery of the sector but industry players have complained that this is insufficient and falls short of their expectations.

The allocation of RM2.1 billion for programmes and initiatives to revive the economy and attract new investments in high-quality, high-tech and green tech industries are expected to spur demand for industrial premises in the country and benefit the industrial property sector.

JLL Property Services 

(Malaysia) Sdn Bhd 

country head 

YY Lau

Tax relief for property owners who offer tenants rental discounts of at least 30% until June 2022 as well as for renovation costs of up to RM300,000 for landlords to comply with SOP requirements could lead to increased spending power and reduce the burden of individuals and businesses.

The provision of RM100 million in grants for automation for more than 200 firms in the manufacturing and services industry and RM100 million in grants for bumiputera small and medium enterprises in the aerospace industry can help increase the attractiveness of the manufacturing sector and help them move up the value chain, from being labour-intensive to being capital-intensive, especially in digital/high-tech industries.

For the residential sector, the removal of the RPGT on disposal of residential properties from the sixth year of ownership may increase residential transaction activities in the market and reduce the burden of property owners, whereas the RM2 billion allocated to credit guarantee schemes to benefit workers with no fixed income and the RM1.5 billion for housing projects for the lower-income group may encourage first-home ownership.

The RM600 million allocated under Penjana Tourism Financing and BPMB Rehabilitation Scheme; the RM30 million worth of grants allocated to 738 budget hotels under the Ministry of Tourism, Arts and Culture; the RM20 million allocated to the Malaysia Healthcare Travel Council; and the RM50 million and tax exemptions allocated for cultural and art events, competitive sports and recreation may spur tourist arrivals and receipts upon the reopening of Malaysia’s borders.

Nawawi Tie Leung Property 

Consultants Sdn Bhd

executive director and regional head for research and consulting 

Saleha Yusoff

There were no major projects that could create significant multiplier effects on the economy. Of the RM322.1 billion, only 23% is allocated to development expenditure. A slightly higher allocation, such as for infrastructure development in the less developed states, would boost these economies.

The RM200 million allocation for Technical and Vocational Education and Training (TVET) for collaboration with industries is expected to provide better job opportunities for local talents and, in the long run, will reduce dependence on foreign labour. Developers could collaborate with the government to set up TVET centres, especially in new townships, where industrial activities could be attracted to be set up to act as catalysts.

The removal of the RPGT from the disposal of real property from the sixth year is welcome, especially in the current soft market conditions, where there are fewer speculative activities. Many of these investors could be senior citizens by now and the extra cash would definitely help them.

Zerin Properties 


Previndran Singhe

It is superb that the proposal to abolish the RPGT on homes disposed of from the sixth year for Malaysians and permanent residents in the country has been approved. It had been advocated by the MIEA Task Force and is a positive step towards invigorating the property sector.

In addition, the allocation of RM1.5 billion for Rumah Mesra Rakyat is very welcomed. We hope the government finds an efficient mechanism to see this through.

The RM2 billion housing credit guarantee is fantastic as it opens up a market that will now be able to purchase properties, where they could not before. This will help, in a small way, to reduce the overhang. However, implementation is key.

We are disappointed that no further incentives were provided for the secondary and commercial markets.

Savills Malaysia 

group managing director 

Datuk Paul Khong

Budget 2022 did not give the real estate sector a “booster shot”, which is much needed now, but it was a good move to review the RPGT again to be in line with its original spirit of curbing speculation. 

Although no RPGT is payable for residential sales from the sixth year from 2022, it currently serves more like an exit tax, as the RPGT continues at 5% in perpetuity (since 2019). There were no big wins for the real estate sector to help it through the current pandemic going into 2022.

KGV International Property Consultants (Johor) Sdn Bhd 

executive director

Samuel Tan

Apart from the abolition of the RPGT for properties held from the sixth year, which was a long-awaited measure, there was hardly any good news for the property market. We were expecting an announcement on the extension of the Home Ownership Campaign, at least until June 2022, and were disappointed. I hope it will be announced during the Budget debate.

It is good to note the conscientious efforts to make loans available to selected segments of society. Provisions for low-cost housing such as Rumah Mesra Rakyat and the RM2 billion housing credit guarantee for housing schemes is a welcome move to encourage homeownership. The effectiveness of both schemes depend, however, on various factors and their implementation. For example, the RM1.5 billion for affordable housing depends on factors such as location and quality. It is time to take stock of the effectiveness of such policies by looking at the occupancy rates of affordable housing.

In terms of the Johor property market, it is hoped that the RPGT will stimulate the market, which will depend vastly on the reopening of borders.

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