The responses to Mah Sing’s Budget 2018 wishlist is attributable to:
Name : Tan Sri Dato’ Sri Leong Hoy Kum
Designation : Mah Sing’s Group Managing Director
Tan Sri Dato’ Sri Leong Hoy Kum
We laud the Government’s continuous initiatives to encourage home ownership, especially for first-time home buyers. We are also aware of the Government’s concerns about the affordability of properties. Property industry has a larger multiplier effect than other industries, affecting more than 140 subsectors. Hence, stimulating the property industry should therefore have a larger impact on the wider economy.
As property developers work towards supporting the national vision, we hope that the Government will consider the following:
1. More flexible schemes for private developer’s projects
- There are many good housing schemes in the market that enables buyers to own a home
- One of the good example is the PR1MA’s Skim Pembiayaan Fleksibel (SPEF) that enables buyers to have higher loan eligibility and fixed payment for the first 5 years.
- At the moment, the flexible financing scheme is only exclusive for PR1MA’s project. Such flexible schemes, if extended to private developers’ with projects where the houses are priced below RM500,000 and first-time home buyers will enable more buyers to own a home.
- Continuing the MyDeposit Scheme and reintroducing My First Home Scheme would also be good for homebuyers. Rather than having more consumption loans for cars and other debts, it is better for individuals to purchase a home which will appreciate in value in the long run.
2. Continue to waive off stamp duty expenses for first-time home buyers
- The continuation of waiving off 100% stamp duty for homes below RM300,000 is a good move to lessen the burden for first-time home buyers.
- It would further ease home ownership if the stamp duty exemption is applicable for homes below RM500,000.
- More subsidies will also be able to encourage a higher take up rate for first-time home buyers.
3. Reduce Compliance Costs
- We hope the Government will be able to loosen mandatory obligations to ease developers’ burden on compliance costs such as contributions for utilities like TNB, Syabas and IWK, developer charges, land conversion premiums, infrastructure contribution, surrender of land and construction of facilities as these charges represent heavy compliance costs.
- All these would result in cost savings that can be passed directly to the home purchasers with a more affordable properties prices.
4. Lower price threshold for foreigners
- Instead of the minimum of RM500,000 to RM1million threshold for foreign buyers, we encourage the government to come up with a lower price threshold for foreigners. This will promote more foreign investment in Malaysia.
- Majority of the states in Malaysia have a threshold of RM1million while Penang island and parts of Selangor have a threshold up to RM2million for foreign buyers.
- Compared to Hong Kong and Singapore, Malaysia’s property market is very domestically driven. In fact, the foreign buyers in Malaysia is only between 2% to 3%.
- Therefore, we should promote more foreign investments in Malaysian properties as it is also has a multiplier effect in boosting the property industry as well as the economy of the nation.
5. To claim GST input tax credit for affordable residential projects
- In the property industry, GST of 6% is not imposed for residential projects. However, developers are still required to bear the GST for development cost.
- We hope the Government will be able to allow developers to claim the GST input tax credit for development costs incurred for affordable residential products to lessen developers’ burden.
6. Providing tax relief for private developers
- 10% to 20% tax relief on profit will be able to encourage developers to build more affordable homes, especially in areas that are experiencing shortage of homes.
7. Lower personal income tax rate
- With the successful implementation of GST, we hope the Government will consider to lower the personal income tax rate for individuals.
- This allows individuals to have more disposable income which can be used for investments.
8. Increase EPF Account Two Percentage Allocation
- The Government can consider revising the percentage of funds in Employees Provident Fund (EPF) Account One and Two. By increasing the funds in Account Two from the current 30% to 40% of EPF balances, EPF contributors can have more funds in Account Two to pay the downpayment of their property purchase, reduce housing loan and pay monthly housing loan instalments.