DEVELOPERS are hoping that the 2015 Budget will offer incentives to help first-time house buyers to own a property and that the ban on the Developer Interest Bearing Scheme (DIBS) will be lifted.
LBS Bina Group Bhd managing director Datuk Sri Lim Hock San hopes that residential properties will also be zero-rated and that there will be more initiatives by the government to help first-time buyers get their loans.
If a property is zero-rated, the developer may reclaim any Goods and Services Tax (GST) paid on the construction materials and there would be no embedded GST in the final price of the property as it could be refunded.
Loan rejection rate is currently high, he told Property Times.
The tougher mortgage rules introduced by Bank Negara Malaysia has also negatively affected first-time buyers.
It is learnt that financial institutions have rejected more than 50 per cent of housing loan applications as eligibility is now based on net income rather than gross income.
Mah Sing Group Bhd group managing director-cum-group chief executive Tan Sri Leong Hoy Kum is also hoping that the government will re-introduce DIBS for first-time buyers.
“This will bridge the gap for genuine buyers who will only be able to afford their first house in two to three year’s time, allowing them to lock in properties at current prices.
“With salary increases in two to three years, the repayment capability of purchasers would have increased,” said Leong.
Leong is also hoping that the government will extend the 50 per cent stamp duty exemption to first time buyers for properties below RM400,000, and maintain the stamp duty rate of three per cent for portions of the purchase price exceeding RM1.5 million as any increase would add to the burden of owning houses.
As for the GST, Leong hopes that residential properties priced below RM1 million will be zero-rated.
“For further stimulus, it would be good if tax relief is extended to all interests incurred on end-financing for the first house. Alternatively, perhaps the government can consider providing grants of up to 10 per cent of the purchase price of affordable properties to first time buyers so that it will be easier for them to own a property,” he said.