KUALA LUMPUR (Oct 7): The Budget 2023 announcement had some goodies for homebuyers with some extra cash in hand to, hopefully, invest or buy property. Find out what the property consultants have to say about what the budget is offering next year:
Knight Frank Malaysia deputy group managing director Keith Ooi
The RM200 million allocation for the tourism industry is welcomed news, as it is expected to spur the hospitality sector, which was badly affected from the border closures and lockdowns.
The stamp duty exemption of 75% for residential properties transacted at more than RM500,001 to RM1 million for first-time homebuyers is also welcomed, as it will encourage home ownership.
KGV International Property Consultants (Johor) Sdn Bhd executive director Samuel Tan
As expected, it is an election budget with goodies for almost all groups. For the first time, there was no direct reference for the housing sector save for some funds for the armed forces and housing policies.
The good news is the reduction in the personal income tax for particular brackets by 2% and small and medium enterprises to 15% from 17%. Hopefully with the higher disposable income, more will use them for property investments which are obviously a good hedge against inflation.
The 100% stamp duty exemption for houses RM300,000 and below as well as 75% stamp duty exemption for RM750,000 houses is the only direct measure. Very minimum help for the property sector.
As for Iskandar Malaysia, some funds were allocated for the Iskandar BRT and RTS as well as the double-tracked electrified train system. What is heartening is that emphasis is not just on the B40 but also on the M40. This gesture will go a long way to alleviate the hardship faced by these groups.
PPC International Sdn Bhd managing director Datuk Siders Sittampalam
One significant point I can make is the exemption of stamp duty for first-time homebuyers, which are fully exempted right up to 2025 for properties worth RM500,000. With regard to properties from RM500,001 to RM1 million, there is an increase in exemption from 50% to 75%. This goes a long way with respect to the increase in that category (RM500,001 to RM1 million) of housing and in terms of property overhang, which is the second-highest range.
Another significant point is the transferring of properties via love and affection between spouses, which is now open to children and even grandchildren with a stamp duty of RM10. However, I do not see this making a big impact.
In terms of affordable housing, there is the proposed allocation for the Program Perumahan Rakyat housing projects in Marang, Terengganu and Arau, Perlis as well as the Majlis Perumahan Mampu Milik Negara's goal to build 500,000 units of affordable housing across the country by 2025. All these figures look interesting but it has to be implemented.
The RM50 million boost to Pelaburan Hartanah Bhd for bumiputera commercial property ownership will certainly go a long way in respect of bumiputera participation in commercial properties.
Lastly, the housing credit guarantee scheme or Syarikat Jaminan Kredit Perumahan will help in terms of financing properties for self-employed individuals and increase bank loans for residential developments.
Savills (Malaysia) Sdn Bhd group managing director Datuk Paul Khong
The property focus of the Budget 2023 was on "home ownership" again and benefits are only specific for first-time homebuyers as expected.
There was nothing offered for the general population this time around.
Stamp duty and loan agreement exemptions at RM500,000 up to RM1 million are an improvement from the previous rate of 50% to 75% now, in terms of waiver, until Dec 31, 2023.
In the "Kasih Sayang" space, the stamp duty exemption now between husband and wife is given in full while 50% waiver is extended between parents and children. In 2023, transfer within the family from grandparents, parents and children in the same family tree will attract a RM10 stamp duty payment only.
Other benefits given are for Program Perumahan Rakyat and Syarikat Jaminan Kredit Perumahan on housing loans for borrowers without fixed income as well as "recovery initiatives" for the hospitality sector.
Once again, Budget 2023 has no major goodies for the property sector and it will be a long road ahead moving into the new year minus the much required real estate boost.
CBRE | WTW group managing director Foo Gee Jen
Budget 2023 is pretty much neutral towards the property market, with the stamp duty exemption being highlighted… Nonetheless, the budget has more emphasis on the infrastructure works, namely the Mass Rapid Transit, feeder and transit buses in Kuala Lumpur and Johor Bahru. These infrastructures have been addressed, and would give a boost to business activities.
In terms of the spending on the rolling out of fibre optics, 5G would facilitate more digitisation and ease of doing business in the country. On the industrial front, the announcement on the digitalised zones of Bukit Kayu Hitam, Kedah and the oil and gas, petrochemical hub in Pengerang, Johor (where almost RM500 million would be spent on the improvement of roads and infrastructure) would certainly give a boost for our FDIs (foreign direct investments) in the region.
Another positive thing is the green movement, with the introduction of carbon tax which will bode well and encourage a low-carbon industry. On the tourism front, it has been acknowledged that there is a gap in the Chinese zero-Covid policy; but nevertheless the budget aims to stimulate our domestic tourism. There is a lot of tax relief given to help the hospitality industry and some allocation to encourage ecotourism and medical tourism. There is also an allocation of RM10 million for Think City which would improve our visibility in terms of our products, which is a good thing moving forward.
Get our comprehensive coverage of Budget 2023 here.