GEORGE TOWN: The Real Estate Housing Developers Association (Rehda) is appealing to the Penang state government to relook the RM500,000 minimum price ruling for foreigners acquiring residential and commercial properties.
The ruling was announced in Budget 2010 and came into effect Jan 1.
Penang Rehda chairman Datuk Jerry Chan said the RM500,000 cap was too high as residential and commercial units outside George Town city limits, especially on the mainland, were priced much lower.
He said Rehda had submitted a proposal to the state government, urging it to study the matter urgently and rescind the ruling as more than 50% of residential developments in the state fell below the RM500,000 category.
"With the state government propagating the transformation of Penang into an international world-class city, foreigners who wish to come and work here, and invest in real estate may not want to pay too much to invest in property and they might even prefer to live away from George Town. Even those keen to participate in the Malaysia My Second Home (MM2H) programme may be discouraged by the new ruling," Chan said in a telephone interview.
He said although the ruling was made by the federal government, it was within the purview of the respective state governments to adopt the ruling or even rescind it, as the approvals for foreign ownership of property was now under state governments.
"Take Selangor for instance which has decided to suspend the ruling. Just like George Town, property prices in some parts of Selangor, which is a large state, are much cheaper than other prime areas in the state. Hence, the ruling is not viable in some places."
Chan said Rehda members were already worried about the sales of new properties being affected by the ruling.
"Their concern is that the ruling will cut off a segment of people investing in Penang. The state government should continue to push for more participation of the MM2H but the RM500,000 cap will not be helpful."
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