Budget 2023 Wish List – Freeing up Government Agencies and GLC Surplus Land for Affordable Housing Joint Ventures
- Calls for the HOC to be extended to the secondary market
It’s that time of year again, but with a heightened sense of anticipation this time around. The 2023 budget is considered a pre-election budget, and the government is expected to take positive steps with measures to stimulate the real estate market, which has suffered with the Covid-19 pandemic.
The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) said the real estate sector still faces multiple issues of high overhang, rising building material costs, high compliance costs and labor shortages. With rising home loan rates, buyers, especially in the B40 income bracket, are finding it increasingly difficult to obtain home loans.
“With the housing market still on its slow recovery, the housing sector and the housing market need a timely boost from the government to come up with policies, guidelines and incentives to revive the housing market,” he said. it declared to EdgeProp.my.
To address some of the issues and problems with affordable housing, PEPS said the government should ask state governments, its agencies and government-linked enterprises (GLCs) such as Telekom, Indah Water Konsortium (IWK) and Federal Land Development Authority (Felda) to release their excess land to partner with property developers to build affordable housing.
“Malaysian reservation land and wakaf land can also be freed up for joint ventures with bumiputera property developers,” he said.
He also proposed to the Ministry of Housing and Local Government (KPKT) to create a unit where he would buy all the unsold units of affordable housing to resell them to private companies to buy housing for their staff or to create a rent-to-own system. for group B40.
Reduce taxes on building materials
The Malaysian Housing and Property Developers Association (Rehda) said various measures have been taken by the government to improve the housing industry and increase home ownership among the rakyat.
The Ministry of Housing and Local Government (KPKT), for example, recently launched the Home Ownership Program or HOPE, which aims to help Malaysians become homeowners.
Various incentives, promotions and initiatives are currently underway under the scheme, targeting B40s and M40s, the two groups who might need the most help to have a place of their own.
“However, Rehda is of the view that more needs to be done to fix the housing and construction sectors to ensure that the issues plaguing them are addressed effectively,” he told EdgeProp.my .
Rehda proposed that the government intervene to mitigate rising building material prices, such as temporarily removing or reducing duties on some building materials until prices return to normal or are more manageable, and by waiving taxes and levies imposed on imported materials.
“The government should also consider reviewing and/or reducing unnecessary charges, such as charges imposed by utility companies and authorities. [It should consider] provision of land for the construction of social and community facilities, roads and drainage and green spaces.
“It should no longer introduce fees, conditions or upward revisions to contribution fees, as developers are already required to put in place the necessary infrastructure for their development projects. And the savings made from reducing relevant costs of doing business can be passed on to homebuyers,” he said.
Rehda also highlighted initiatives to help first-time buyers, such as tax deductions to be granted on interest incurred during the construction period for first-time buyers or personal tax relief of RM20,000 for first-time buyers of properties priced up to RM500,000; a one-time first-time homebuyer grant of RM30,000 for properties priced up to RM500,000 and/or to continue the MyHome Scheme 2 program to eligible buyers. More banks should also be encouraged to actively implement the progressive financing program to close the affordability gap for first-time buyers.
Rehda also offers the rental-purchase system for first-time buyers.
Similarly, PEPS said that with the economy stagnating and the overnight rate (OPR) rising, many Malaysians will still not be able to afford to buy a house.
Therefore, PEPS is offering Bank Negara Malaysia to provide a revolving fund to commercial banks to work with developers to purchase unsold house units at a discount, where commercial banks could finance home buyers for a [lease] five-year period, after which tenants could exercise the option to buy the houses at predetermined prices.
“This rent-to-own system should also apply to PR1MA housing, where there is oversupply. By working with selected commercial banks, this will give the B40 group the opportunity to own their first homes,” he said. he declares.
A strong secondary market will drive purchases in the primary market
Malaysian Institute of Estate Agents (MIEA) chairman Chan Ai Cheng said the government should seek to generate interest in increasing secondary market transactions as this is the key sector of the market immovable.
“To achieve this, we need to shake up the market through programs like the Home Ownership Campaign (HOC),” Chan told EdgeProp.my.
For the real estate market to be strong, Chan said, we need to have a strong secondary market, because when buyers see properties appreciate in price or gain returns through rentals, the interest in investing in the primary market increases, which in turn will help deal with the over-indebtedness situation in the primary market.
“For the 2023 budget, MIEA wants a centralized program like iRumahKu or SPHOC (Secondary Properties Home Ownership Campaign),” she said.
She added that the MIEA could offer the government a platform to centralize for a holistic approach to promoting HOC for secondary or completed properties (including overhang), where the MIEA could play a coordination role similar to this. what the Rehda did for the HOC for the new properties.
She said elements of the proposed scheme are expected to include stamp duty exemptions of up to RM1 million for properties under RM1.5 million and an exemption from Real Estate Gains Tax (RPGT), and that it should be open to all Malaysian citizens and permanent residents.
Echoing the need to boost the secondary market, Malaysian Institute of Property and Facility Managers (MIPFM) Vice President Ishak Ismail said he hoped the government would provide more support to the sector. real estate, in particular by extending stamp duty exemptions to the primary and secondary markets in Budget 2023.
He added that the MIPFM wants the RPGT to be reduced to 20% from the current 30%.
“It’s to give the seller more room to use the [gains] in these trying times,” he told EdgeProp.my.
PEPS concurred with the sentiment and called for the removal of the RPGT for the disposal of properties from the sixth year for Malaysian citizens and permanent residents, other than businesses.
She also wanted stamp duty exemptions to be extended to secondary market buyers.