HBA: Affordable housing policy needs to be targeted at the right segment

PETALING JAYA (Oct 27): The National House Buyers Association (HBA) has lauded the government’s move to build more affordable homes. However, it said the government needs to ensure that the homes reach the right target market.

“They must build the right product at the right place with the right pricing and the right numbers,” said HBA honorary secretary-general Chang Kim Loong in a statement following the tabling of Budget 2018 today.

He notes that the move of extending the step-up financing scheme to private developers could help wage earners own homes but this could be detrimental in the mid to long term as developers may be inclined to increase house prices, knowing that buyers can take up higher end-financing.

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“The government should take measures to slow down escalating property prices by increasing the entry and exit cost of owners of multiple properties such as increasing the stamp duty and real property gains tax,” he offered.

Beside this, HBA also suggested the government to give more incentives to developers to build affordable properties such as alienating land at lower cost, giving fast track approvals and even tax exemptions.

In addition, HBA has called for the cost of laying the last mile of utilities such as water, electricity, sewage and telecommunications to be borne by the respective utility companies in order to lower the cost of properties.

On the tax exemption for rental income, Chang said that as there was no announcement regarding tenants being able to claim tax deduction on such rentals paid, the move may instead encourage more speculative purchases of residential properties by property syndicates and investors club, which will further drive up property prices.