KUALA LUMPUR (Oct 21): Real estate consultants are worried that the increase in stamp duty for real estate transactions priced above RM1 million from 3% to 4% starting January 2018 will have a  negative impact on the property market.

“The cost of owning a property is made higher. This is very punitive for those purchasing non-residential properties worth more than RM1 million because they have to bear the brunt of the 6% GST too. There should be some refinements in this sub-sector,” said KGV International Property Consultants executive director Samuel Tan.

He added that in Johor, foreign buyers will have to pay an additional 2% levy. Hence, the total taxes for foreigners to own a property would be 12%, “which is exorbitantly high and will certainly discourage [property] investment”.

Oregeon Property Consultancy Sdn Bhd managing director Wong Wen Chet said the increase in stamp duty will hit the commercial and industrial property market hard.

“The market [for commercial and industrial properties] is already very slow after the implementation of the Goods and Sales Tax (GST), the 1% might not sound much but for properties worth RM2 million to RM5 million, the incurred cost will be a lot as the tax they need to pay is over 10%,” Wong added.

For Henry Butcher Malaysia COO Tang Chee Meng, the stamp duty rise will dampen demand for properties in the price range of RM1 million and above.

“However, developers will not be encouraged to build more affordable homes as there are not enough subsidies or incentives for them to do so,” he said.

Meanwhile, JLL associate director for research and consultancy Veena Loh has a different view. She said the move may impact housing prices as developers may lower property prices to slightly below the threshold of RM1 million to attract buyers.

“To sell below RM1 million, developers will also offer unfurnished units or sell different components separately, such as the carpark space, to lower the selling price,” she explained.

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