Property tax in Johor will not affect UEM Land

KUALA LUMPUR: UEM Land Holdings Bhd does not expect the proposed property tax hike in Johor to affect foreign appetite for its projects in Iskandar Malaysia, said CEO Datuk Wan Abdullah Wan Ibrahim.

UEM Land is seen as a proxy developer to Iskandar Malaysia, which has seen a flurry of new projects initiated since last year involving both local and foreign companies.

In 2012, UEM Land garnered 54% of its revenue from properties in Nusajaya.  

Speaking to reporters after the company AGM yesterday, Wan Abdullah said foreign buyers will not be deterred by the impending property tax hike in Johor.  

“I don’t think foreign investors will be adversely affected as it takes more than just taxes to turn them away. The Johor government has every right to impose taxes on foreigners, which is a practice in other countries as well.

“They are more concerned with the relationship between the governments of Singapore and Malaysia and security issues. The property tax is just a small component in their consideration,” he added.

The Johor government recently announced plans for a tax hike by the end of the year on some 130,000 foreigners who own property in the southern state.

Johor Menteri Besar Datuk Seri Mohamed Khaled Nordin said the move would help local councils generate more income to help  existing operations, as the last adjustment on the assessment rate was made in the 1980s.

The move is expected to affect foreigners who are buying into high-end properties in Iskandar Malaysia. It is believed that foreign owners of lower-end properties will not see a tax increase for the time being.

Wan Abdullah said UEM Land expects to launch new properties with a total gross development value (GDV) of RM4 billion this year. As at March 31, 2013, UEM Land’s unbilled sales stood at RM3.55 billion.

He believes that the increasing number of foreign shareholders is a sign of increasing optimism in the UEM brand. “Foreign shareholding has increased from 15% in 2012 to 21% this year, indicating their trust in the strength of our company and our backers,” he said, referring to Khazanah Nasional Bhd which owns 100% of the UEM group.

Looking forward, the company said it is exploring the possibility of entering the Sabah and Sarawak market.

“We are very keen ... especially Kota Kinabalu. We will make an announcement once we have signed on the dotted line with our partners, hopefully by the end of this year,” he said.

Wan Abdullah added that the company has also identified potential landbank targets overseas including in India, Australia, and Indonesia. UEM Land’s current total landbank stands at 10,600 acres (4,282ha).

At the AGM, shareholders approved the proposal to change the company’s name to UEM Sunrise Bhd. Chairman Tan Sri Ahmad Tajuddin Ali said it will play a prominent role in the development of key high-rise projects for the UEM group, particularly in Nusajaya.

This article first appeared in The Edge Financial Daily, on June 13, 2013.


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