KUALA LUMPUR (Oct 11): Several property-related measures were announced during the tabling of Budget 2020 by Finance Minister Lim Guan Eng, including adjustments to the real property gains tax (RPGT) and the lowering of the threshold for foreign buyers of high rise properties, as well as the introduction of a Rent-to-Own (RTO) scheme for first-time buyers.
Here’s what property developers think of the Budget measures:
Mah Sing Bhd founder and group managing director Tan Sri Leong Hoy Kum
Lower foreign ownership threshold for high rise properties in urban areas
Lowering the threshold of high-rise property prices in urban areas from RM1 million to RM600,000 in 2020 will have a positive impact as foreign buyers are a blue-ocean pool of potential buyers who can reduce the overhang of properties in this price point. It is crucial that respective State Governments will respond to this positively and revise their ceiling price accordingly.
Shift of the real property gain tax (RPGT) base year to 2013 from 2000
Revising the base year will allow sellers to pay lower RPGT. We hope continuous improvements to the RPGT policy can be considered to boost more interest and activities in the secondary property market, as many buyers are looking to upgrade after disposing of their older units.
RTO scheme for first-time homebuyers
The announcement of the new Rent-To-Own (RTO) scheme is favourable towards first-time home buyers who are facing difficulties in coming up with the initial 10% down payment and securing end-financing as it serves as an alternative option for home-ownership.
As end-financing has continued to be amongst the major challenges for home buyers, we believe the RTO scheme would help to stimulate the market as first-time home buyers are now given aid and flexibility to own their preferred home at the agreed purchase price during the leasing tenure once their financial position strengthens.
Extension of BSN’s Youth Housing Scheme
We appreciate the Government’s initiatives to help youths and young married couples to own their first home by extending the BSN Youth Housing Scheme from Jan 1 2020 to Dec 31 2021. The scheme is offered for financing the purchase of either completed, under construction or sub-sales properties priced from RM100,000 to RM500,000.
Obtaining mortgage has been the number one challenge of owning a home, hence offering a 10% loan guarantee to enable borrowers full financing and RM200 per month instalment assistance that will be credited to customer’s financing account for a period of two years will greatly help more youths and young married couples in owning their first home.
SP Setia Bhd president and CEO Datuk Khor Chap Jen
On the RTO scheme for first time homebuyers
We applaud the Government’s initiatives in Budget 2020 to raise the ceiling price of homes made available under the Rent-to-own Scheme, from RM300,000 to RM500,000 as this will give first-time home-buyers more options to choose from.
The increase in the allocation for the scheme, from RM1 billion to RM10 billion, including a guarantee of RM3 billion by the Government shows that the Government sees home ownership as a very critical issue for the rakyat.
However, it is noted that under the current scheme, only RM156.2 million worth of loans was approved. We hope the lending guidelines and criteria will be reviewed, especially for first-time home-buyers, for them to benefit from the scheme.
Lower foreign ownership threshold for high rise properties in urban areas
The reduction of the foreign ownership threshold value for unsold stocks of condominiums and apartments located in city areas from RM1 million to RM600,000 will help to reduce the overhang for these type of properties, as developers can market these range of products to foreign buyers. We hope that the State authorities will follow suit on this.
Improvement on amenities for low and medium-cost stratified housing
The Government’s focus on improving the amenities and security for low and medium-cost stratified housing is very much lauded, as it will help to improve the overall standard of living for the residents currently residing in such developments.
Titijaya Land Bhd deputy group managing director Lim Poh Yit
Lower foreign ownership threshold for high rise properties in urban areas
We opine that the Government’s initiative to reduce the threshold value for property purchases in the city (for condominiums and apartments) for foreign purchases from RM1 million to RM600,000 will definitely help to increase the sales of unsold high-rise units.
RTO scheme for first-time homebuyers
This will help to reduce the burden for young working adults and families who face rising living costs and enable them to finally own a home.
Waive of stamp duty for transfer of ownership
Waiving the stamp duty for ownership transfer between developer and bank as well as between buyer and bank is also a good move to rejuvenate the property industry’s performance.
VPC Alliance (Malaysia) Sdn Bhd managing director James Wong
Shift of RPGT base year
It would not be prudent for the Government to revise the RPGT to zero in 2020, as this would be seen as a U-turn after the increase in Budget 2019. So the next best thing is to adjust the base year of the RPGT to 2013 from 2000.
With this, the tax payable on capital gains would be lower and we see this measure will help increase transactions in 2020.
Lower foreign ownership threshold for high-rise properties in urban areas
This measure is good in alleviating the overhang of high-end high-rise units in the property market. The Government said it was for high-rise properties in urban areas, so they will probably come up with its definition of urban areas.
RTO scheme for first-time homebuyers
This RTO scheme is a good measure to help in alleviating the overhang in the property market. A lot of first-time buyers have problems in coming up with the 10% or 20% deposit. The RM10 billion fund allocation and the 30% guarantee by the Government will encourage more potential buyers to come into the market to rent and equitise their purchase within the five-year window.
Real Estate and Housing Developers Association Malaysia president Datuk Ir Soam Heng Choon
Lower foreign ownership threshold for high rise properties in urban areas
Reducing the foreign home ownership threshold for strata properties to RM600,000 is seen as a positive move to the industry. Although limited to a one-year period in 2020 and specific to only urban areas, we foresee that it will assist in alleviating the unsold units issue. We call upon the Federal Government to ensure support from State Governments in implementing the threshold limit for this period, as this is still very much a matter where States have the final say.
Shift of RPGT base year
We also welcome the Government’s announcement to revise the Real Property Gain Tax (RPGT) imposed on disposal of properties after five years onwards for assets acquired before Jan 1 2013. With the change of the base year, earlier set at Jan 1 2000, we believe that this will significantly lessen the burden of homeowners who are planning to sell their houses.
Sunway Bhd managing director, property division, Sarena Cheah
Sustainable Development Goals
Sunway applauds the Government’s support towards the United Nation’s Sustainable Development Goals. We strongly believe that sustainable progress can be achieved if the private sector, the government and all levels of society work together to accomplish the goals.
Building digital infrastructure
Stakeholders of the smart sustainable cities will benefit from the National Fiberisation and Conectivity Plan involving a total investment of RM21.6 billion, as well as the focus on building digital entrepreneurship through the 5G Ecosystem Development Grant of RM50 million.
Attracting Fortune 500 companies
By attracting foreign direct investments from global Fortune 500 corporations in the digital sector, we hope to see a pick-up in property sector, especially in the commercial sub-sector and enable job creation which will then create a more robust real estate market, especially in the urban areas.
Lower foreign ownership threshold for high rise properties in urban areas
This will help alleviate the current overhang situation in the real estate sector by incentivizing developers to promote their properties in foreign markets.
RTO scheme for first-time home buyers
Finally, we also congratulate the government for being caring to the needs of its people and especially youth through the Rent to Own (RTO) financing scheme.