By Wong Siew Lai, General Manager – Malaysia and General Manager – Marketing & Communications, iProperty.com Malaysia Sdn Bhd
23 October, KUALA LUMPUR: On behalf of iProperty.com.my, Malaysia’s No.1 property site, we would like to share our thoughts in conjunction with the upcoming Budget 2021 announcement. iProperty.com.my’s wishlist for the upcoming National Budget 2021 scheduled to be tabled in November 2020 are as follows:
1. To further rejuvenate the local property sector, we hope the government could consider reducing the stamp duty tax for first-time home buyers after the end of the current Home Ownership Campaign on 31 May 2021. A stamp duty reduction is essential to help young Malaysians get on the property ladder. On the same note, stamp duty exemptions could be extended to the secondary market which will further provide an opportunity for property seekers to explore subsale properties.
2. We hope the government will review policies and introduce supplementary measures to encourage homeownership among young people. For instance, tax relief for home loan interest incurred by first-time home buyers should be re-introduced to further encourage homeownership among young people. The earlier that a homebuyer gets onto the property ladder, the more time they have to benefit from capital appreciation of their properties.
3. The full exemption of Real Property Gains Tax (RPGT) that was announced under the PENJANA package is greatly welcomed. At the moment, the exemption is limited to the disposal of three units of residential homes per individual. We hope the new budget will improve on the existing RPGT initiative by removing or loosening the limitation of disposal units per individual to encourage more confidence in property sellers. This will help to stimulate more transactions and encourage sellers to pass on the savings from the exemption to the buyers.
READ: Latest stamp duty charges, RPGT, legal fees & 4 other costs to consider before buying a house
4. Another factor that could stimulate the local property market is investments from foreign buyers. With this in mind, we hope budget 2021 will quickly revive the Malaysia My Second Home (MM2H) programme to help encourage foreign home buyers to invest in the local property market. In addition, the application process could be made more streamlined and investor-friendly to encourage more foreign buyers. Even though the MM2H programme only encompasses a relatively small number out of the total home buyers in Malaysia, it is an important driver of foreign buyer demand. Furthermore, the MM2H programme could help in reducing the property overhang and the supply of unsold units in the secondary market.
5. One other initiative that we would like to see is rental incentives. The sense of uncertainty brought about by COVID-19 might see more people preferring to rent than buying a house. As more people are working from home, the need to have a comfortable and conducive living environment is now more important than ever. Renting provides an opportunity for people to save on accommodation costs in the short term. For example, the government could introduce an initiative that provides incentives to first-time and seasoned renters. On the other hand, homeowners who are finding it difficult to sell during these times could consider renting if the right incentive is in place to assist landlords. For example, earlier this year the government introduced tax deductions to landlords who provide discounts on rental rates.
What measures are you hoping for this year? In the meantime, check out our Buying and Renting property guides.