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Budget 2022: HBA welcomes property market incentives, hopes Gov can build a database for affordable housing schemes


The National House Buyers Association (HBA) share their opinion on the recently announced property market allocations under Budget 2022 and several recommendations for improving the success of these incentives. 

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The National House Buyers Association (HBA) acknowledges the challenges faced by our Honourable Finance Minister in tabling the Budget 2022 from the Government on Friday, 29th October 2021 in view of the COVID-19 pandemic affecting the global and regional economies as well as the financial health of Malaysia.

Our comments and response to Budget 2022 on matters relating to the property sector are as follows:

1. Allocation of RM1.5 billion to build Affordable Properties

HBA welcomes the announcement that the Government will allocate up to RM1.5 billion to build comfortable and quality homes for the lower-income segment.  This is a noble aspiration by the Government to ensure that every Rakyat including those in the lower parts of the income chain has access to comfortable and quality housing.

HBA hopes that proper planning, allocation, distribution and execution is done to ensure that these Affordable Properties are built for the targeted groups with the following caution from us, among other things:

Build a database for affordable housing schemes/financing in Malaysia 

In the past five decades, various low and medium-cost housing projects, as well as government housing schemes such as MyHome, PR1MA, Rumah Selangorku, etc have been introduced in Malaysia. Many housing funding plans such as the BSN MyHome Scheme and Rent to own have been introduced in Malaysia.

Information on these affordable housing projects, including those under construction or being planned by the various government or private housing providers, state economic agencies, and funding schemes – should be made available to the public domain in a common database.

This will allow individuals to learn about the availability of those low, medium and affordable categories in their communities and the financing options available.

Single ‘umbrella’ to coordinate affordable housing distribution and availability

It seems that the local councils and land offices have their own respective directives from their State Government to impose mandatory ‘low, medium and affordable costs’ housing categories. Have they have been overzealous in carrying out the directives? Has anyone made the last count of the numbers of low-cost units that are available in the market but remained unsold? Has there been an overhang of such properties?

READ: Why are there so few people buying Rumah Selangorku (RSKU) homes?

Why isn’t there a ‘single umbrella’ or ‘data bank by the federal government where information can be collected to coordinate the total numbers of such units being built, the location and pricing? With a click of a button, one must be able to get the information that her/ she requires: information of types, makes, location and price of the available units of house/ stratified properties.

Example: With a click of a button, a potential buyer should be able to find their dream single storey measuring 22’ x 70’ terrace, priced at approx. RM180,000 at Ulu Yam, Selangor. The Government or the related Ministry should set up a data bank on housing projects.

At HBA we have an adage: “They must build the right product at the right place with the right pricing and the right numbers”.

The government agencies cannot possibly build an apartment block in a place where there is only demand for landed property or built houses. Or build where there is practically no demand and which will just add to the statistics of ‘overhang’ (built and unsold) properties.

Affordable Properties must fulfil certain criteria

1)    Price – below RM300,000
2)    Size – Minimum build-up of 900 sq feet excluding balcony
3)    Location – near public amenities such as rail transportation (MRT/LRT) and other public amenities such as schools, hospitals, etc.

2. Allocation of up to RM2 billion for Housing Credit Guarantee Scheme for employees without a stable income

© nizamkem | 123rf

HBA welcomes the announcement that the Government will allocate up to RM2.0 billion for the Housing Credit Guarantee Scheme to guarantee Housing Loans in order to help those without a stable income such as in the Gig Economy to buy properties. The Gig Economy or Freelancer economy has been a lifesaver to many of the Rakyat who lost their jobs and resorted to becoming ride-hailing drivers, food delivery riders and other forms of freelance work.

These employees are still economically productive and should have access to financing to buy assets such as property. However, their income may not be consistent and many lack the full documents that Banks typically require from fixed income salaried employees.

This Guarantee Scheme would be very beneficial to the employees in the Gig Economy to buy their own property. However, HBA hopes that this Housing Credit Guarantee Scheme will be limited to First Time House Buyers and only for Affordable Properties.

FIND OUT: Housing loan checklist: 4 documents you need to prepare if you’re an employed person

Abolishment of RPGT for properties held for more than 6-years

Andriy Popov | 123rf

HBA welcomes the proposal to abolish RPGT for the sale of properties held for more than 6 years. HBA had in the past urged the Government to abolish RPGT for properties held for more than 6 years as RPGT meant to be an anti-speculative tax and property held for more than 6-years would not be deemed as speculative investments but mid to long term investments. Syabas and Tahniah to the government for this move!

General Economy

Budget 2022 also announced the continued reduction in the employee contribution for the Employees Provident Fund (EPF) from 11% to 9% up to 30 June 2022. This move is expected to increase the disposable income of the Rakyat and is hoped that it will indirectly help to stimulate the local economy.

Although HBA supports moves to increase the disposable income of the Rakyat, HBA hopes that employees will have the option to maintain the contribution at 11% if they so wish to as the dividends from EPF is still much higher than the current fixed deposit rates offered by Banks.  Contributors of EPF must be mindful that the monies in EPF should always be intended to be used as retirement funds and not to splurge on unnecessary things.

Find out the key highlights and more incentives for the rakyat announced under Budget 2022 here.

?Real Property Gains Tax (RPGT) in Malaysia & How to calculate it?
?️List of legal documents required when buying a house in Malaysia

Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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