KUALA LUMPUR: The National Housebuyers Association is puzzled as to why the government has decided to continue subsidising developers who give discounts to housebuyers.
Its secretary-general, Datuk Chang Kim Loong, said that this was despite the Local Government Minister Zuraida Kamaruddin’s explanation as to why the government was using taxpayers money to assist in developers’ overhang.
“Why should the rest of the country subsidise these developers marketing of their products?
“They made a bad business decision and the rest of us have to subsidise their loss?
“Why don’t these developers just give a ‘sufficient’ discount on these properties?
“Its elementary economics that when a product can’t sell, you sell it cheaper in a soft market.”
Chang also said the reduced amount of collection of such fees meant that government spending was being paid from other tax monies.
“What is the difference between (1) a property of RM1 million with the stamp duties (tax) of RM24,000 waived by the government and (2) the developer selling the property at RM976,000 and the purchaser paying the RM24,000 (plus/ minus) stamp fee to the government?
“The purchaser still pays RM1 million (plus/minus) in both cases.”
The finance minister had earlier announced that 21,000 homes, worth RM13.44 billion, that were sold under the home ownership scheme where developers offered discounts of at least 10 per cent to their buyers were in turn matched with exemptions in stamp duties.
This he said had surpassed the earlier target of RM3 billion.
Chang also disagreed with the government’s decision to continue to charge the real property gains tax (RPGT) of five per cent for gains on disposal of properties after the sixth year.
“With the Budget (2020) announcement, it means that Malaysian individuals and permanent residents will have to continue to bear the five per cent RPGT even though they have diligently persevered beyond the five years.
“This reflects badly on the government, notwithstanding the fact that the reference date (for the valuation of the property/ ‘point of valuation’) imposed will be calculated with effect from Jan 1, 2013, instead of the previous Jan 1, 2000.
“There seems to be a slight relief but HBA is of the view that the previous RPGT regime was far superior where no RPGT was payable beyond the fifth year.”
Chang however applauded the government for setting up the Affordable Housing Fund.
“This lower income segment often finds it very challenging to buy their dream homes due to two factors, namely coming up with the 10 per cent down payment and qualifying for a housing loan.
“The Affordable Home Fund (AHF) helps the lower income segment to buy their dream homes by tackling both challenges at the same time.
“The lower interest rate will help to reduce the burden of the lower income segment and give them more disposable income for other urgent needs and also to have some savings for emergencies.
“Bank Negara has claimed that this scheme can result in savings of up to 23 per cent and this will certainly help these participants of the AHF.”
Chang was referring to the fund which Lim announced had, as at September 2019, a total of 2,840 applications amounting to RM472.7 million. The approval rate is 77.9 per cent, with 982 total applications worth RM156.2 million being approved.
Malaysian Youth Council (MYC) president Jufitri Joha also lauded the fund as well as the government’s rent to own scene to help new owners.
This is meant to assist those who are unable to pay the 10 per cent deposit and to secure the access of home purchase financing.
The government will be working with financial institutions to introduce a Rent-To-Own (RTO) scheme.
“This will help housebuyers whose main stumbling block is coming up with a downpayment.”
He also commended Putrajaya’s decision to extend the youth housing scheme but hoped that it would increase the number of units to more than 10,000 in future.
To help youth own their first home, the government would extend the youth housing scheme conducted by Bank Negara from Jan 1, 2020, to Dec 31, 2021.
The scheme also offers a 10 per cent loan guarantee through Cagamas to enable the borrower to obtain full financing and assistance of a monthly installment of RM200 per month for the first two years, limited to 10,000 units of houses.
Meanwhile, the Real Estate and Housing Developers’ Association (Rehda) believes the government’s decision to lower the home ownership threshold for foreigners marks a positive move for the industry.
Its president, Datuk Soam Heng Choon, commenting on the 2020 Budget announcement yesterday, said the threshold reduction, from RM1 million to RM600,000, would resolve the issue of unsold residential properties.
“Although limited to a one-year period in 2020 and specific to urban areas, we (Rehda) foresee that it will alleviate the unsold residential properties issue,” he said, adding that he urged the government to ensure support from the state governments on the decision.
He said the government’s announcement of the Rent-to-Own Scheme, with financial institutions providing financing of up to RM10 billion, would help prospective homebuyers.
“Those who are not ready to purchase will have the option to rent a home first and buy it later based on the price fixed at the time the tenancy agreement is signed.
“This, along with the stamp duty waivers on the memorandum of transfer and loan agreement, will play a role in increasing home ownership among the rakyat, as per the national housing agenda.”