Several positive policy changes have been made to boost the local property development and construction sectors since the onset of the global credit woes. Some of the changes were included in Budget 2009 and the two stimulus packages that followed, which totalled more than RM273 million.

Exemption from Foreign Investment Committee (FIC) approval for commercial property transactions below RM500,000 and only limited to own use was announced in the first stimulus package in November 2008. Employees Provident Fund contribution for employees was lowered to 8% from 11% (optional) effective January 2009, while open tenders for government-owned prime land were initiated for government-linked companies and the private sector.

Under the second stimulus package in March this year, policy changes included tax relief on housing loan interest paid up to RM10,000 per annum for the next three years and deferment of repayment of housing loans for one year from March this year. For retrenched individuals, these measures were effective from July last year.

Another policy change under the second stimulus package was permanent resident status for high net worth individuals bringing in more than US$2 million in investments or savings in Malaysia.

Meanwhile, the local steel industry saw further liberalisation. The Ministry of International Trade and Industry said it would grant manufacturing licences without restriction to encourage more iron and steel production and consequently increase supply to curb the shortage faced by the industry. Waiver of import duties for cement and steel was also announced in the first stimulus package.

The long-awaited deferment of the stamp duty of 0.5% of the total contract sum in the construction industry finally became a reality. From Sept 15 this year to Dec 31, 2010, stamp duty of RM50 will be imposed on all service agreements. Ad valorem stamp duty of 0.5% of the total contract sum will, however, resume after Jan 1, 2011.

In June this year, the government further opened up the property market by doing away with the FIC approval for property transactions except for commercial transactions above RM20 million that would dilute bumiputera/ government interest. The threshold for commercial property transaction by foreigners was also raised to RM500,000 from RM250,000.

On Sept 14, Finance Ministry-owned Syarikat Prasarana Negara Bhd said two light rail transit line extensions in the Klang Valley measuring a total of 34.7km, would be constructed, at a cost of RM6 billion to RM7 billion.

Upon completion, the project would enhance the accessibility of these areas and promote property values.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 787, Dec 28, 2009-Jan 10, 2010