Incentives for foreign property buyers needed

PETALING JAYA (June 5): The property market stimulus measures announced under the country’s Penjana Short-term Economic Recovery Plan (ERP) today would benefit the domestic market but the country needs foreign investors to help the market recover as well, said the Associated Chinese Chambers of Commerce & Industry of Malaysia (ACCCIM) head of taxation committee Koong Lin Loong (pictured).

Koong noted that current measures are focused on local property purchasers hence the impact may not be significant as local buying sentiments are expected to remain low owing to present and future uncertainties.

“To create greater vibrancy, we need more foreign buyers to come in as there are only limited local buyers in the market. This is what the newly announced ERP lacks,” he added.

Nevertheless, Koong said the incentives would be helpful for Malaysian homebuyers as well as residential property owners who are looking to dispose of their properties.

Under Penjana, the Real Property Gains Tax (RPGT) will be exempted for the disposal of residential properties by Malaysian individuals from June 1, 2020 to Dec 2021, limited to three properties per individual.

Previously, property owners would be charged 5% to 30% for the disposal of residential properties.

“Property owners who are able to conclude their sale transactions within this period are able to conserve more cash, which could help to improve their cash flow. It would be even better if the exemption could extend to all property types,” Koong told EdgeProp.my.

He also lauded the return of the Home Ownership Campaign (HOC) which offers at least 10% discounts and stamp duty exemptions for homebuyers.

Koong said the stamp duty exemption on loan agreements and on the instruments of transfer for the purchase of residential properties under HOC, priced from RM300,000 to RM2.5 million would mean savings for homebuyers.

“Although the exemption on the instrument of transfer is limited to the first RM1 million of the home purchase price, based on rough calculation, one could save at least RM24,000 on stamp duty if he/she purchased a property priced RM2.5 million for instance,” said Koong.

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