Rehda urges government to reconsider new budget policies

PETALING JAYA: The Real Estate and Housing Developers’ Association of Malaysia (Rehda) hopes the government will review several policies announced in Budget 2014 which may affect the property sector.

They include the 6% goods and services tax (GST), the real property gains tax (RPGT) hike and the ban on the developers’ interest bearing scheme (DIBS).

“We urge the government to consider exempting the housing industry from GST or be zero rated and material and other related costs be exempted from the GST,” said Rehda deputy president and organising chairman of the Rehda Annual Dinner 2013, Datuk FD Iskandar Mansor.

He said Rehda strongly feels this will ensure the government meets its objective of helping to make homes available and affordable to the middle-income population.

On the hike in the RPGT effective Jan 1 next year, FD Iskandar hopes the government will not “burn the candle at both ends”.

A RPGT of 30% will be imposed on properties sold within the first three years. This is followed by 20% in the fourth year and 15% in the fifth year. The RPGT will not be imposed on properties sold from the sixth year onwards.

“We as industry stake holders feel the new RPGT rate will have a negative impact on the secondary market. This will create unnecessary pessimism which will slow down sales. It will eventually cause a delay in the disposal of properties by genuine sellers which will only impact the future supply to the market,” said FD Iskandar.

“The 30% RPGT imposed on the disposal of properties by foreigners within five years will send a wrong signal to investors on our property investments and promotion policies,” he said.

FD Iskandar: We urge the government to consider exempting the housing industry from GST or be zero rated and material and other related costs be exempted from the GST.

The ban on DIBS, according to FD Iskandar, will undoubtedly affect property developers. He said banks and financial institutions need to play their part to weed out speculators by not approving property loans to those who are buying for the sole purpose of flipping.

However, FD Iskandar lauded the government’s move to introduce the private affordable housing ownership scheme (MyHome) to encourage the private sector to build more low- and medium-cost houses.

One of the possibilities that Rehda has proposed to the government is to convert the low-cost housing quota to the affordable housing quota and that the management of housing for the hardcore poor be reverted to the government via its agencies such as Syarikat Perumahan Negara Bhd, state economic development agencies and the National Housing Department.

Rehda also called for the streamlining of state level policies, which differ from those of the federal government, for an efficient delivery of affordable housing to the rakyat.

According to FD Iskandar, the different impositions and requirements for the provision of affordable housing by the various states make it difficult for developers to come up with practical solutions that can meet expectations and satisfy all parties.

The Rehda Annual Dinner 2013 was held on Wednesday evening at the Sime Darby Convention Centre. The event was graced by guest of honour Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan.

Rehda launched its inaugural Rehda Recognition Award in which two awards were handed out. S P Setia Bhd took home the Outstanding Developer award while Tan Sri Eddy Chen was given the Rehda Personality award. Rehda’s immediate past president Datuk Ng Seing Liong was conferred patronship at the event.

This article first appeared in The Edge Financial Daily, on November 1, 2013.

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.