PETALING JAYA: Local property developers have called for a lowering of personal income taxes for Budget 2010 to boost the property market. Budget 2010 will be unveiled on Oct 23 by Finance Minister and Prime Minister Datuk Seri Najib Tun Razak.
A lowering of the personal income tax rate to 25% from the present 27% would result in higher disposable income and spur more individuals to purchase properties, they said on the sidelines of the National Property and Housing Summit 2009 organised by the Asian Strategy & Leadership Institute here on Oct 19.
“With a reduction in income tax levels, it will basically make buying houses more affordable,” said executive vice-president and chief financial officer of S P Setia Bhd Teow Leong Seng who added that at present, there is a disparity between income and expenses.
Sunway City Bhd managing director for property development Ngian Siew Siong said the government needed to move Malaysia into becoming a high-income regime to boost demand.
“Prices of properties and cars have gone up many times in the past few decades, but this is not reflected in wages and salaries,” he said. “People are becoming poorer now, with the rising cost of living.”
He also suggested that the federal government reduce tax rates or make exemptions on imported equipment and other components crucial for green building developments.
“The government should show their commitment for green building technology by taking this step,” he said.
Ngian added that besides the funds allocated in Budget 2010, implementation of the Budget proposals should be done quickly to create a multiplier effect that would benefit industry players and property owners.
S P Setia’s Teow added that careful management of interest rates is also key to ensuring a sustainable economic recovery.
“Interest rates are at an all-time low now. The government should maintain present interests rates and not seek to be aggressive by raising them. Compared with the financial crisis of 1997/98, we are in a much better position now to weather the storm,” he said.
UM Land Bhd's group chief executive officer Pee Tong Lim also hoped that the government would not hike interest rates now. Although demand is slowly picking up, “private demand is still weak”, he said.
The economic stimulus packages should also be kept “for as long as it takes” until the Malaysian economy can regain its footing, said the property developers.