Liew Siew Pen provides a brief roundup of the 2017 Budget features affecting the housing industry
Malaysia Budget 2017 has successfully been tabled by the Prime Minister Datuk Seri Najib Tun Razak. For the housing industry, there are several innovative measures, including the “step-up” end financing scheme and exemption of stamp duty, which will be implemented as part of the initiatives to promote home ownership. Stamp duty on instruments of transfer for properties costing RM1,000,000.00 and above will also be increased from the current rate of 3% to 4% in curbing speculative buying.
The key elements of the Budget affecting the housing industry are summarised below:
- New end- financing scheme for potential buyers of Perumahan Rakyat 1Malaysia (PRIMA) will be implemented from Jan 1 next year. Under the scheme, the conventional ruling on maximum loan offered based on salary scale will be relaxed to check immediate loan application rejection.
- An increase in stamp duty exemption from 50% to 100% for transfer and housing loan instruments to help reduce the cost for first- time house buyers. However, the exemption is only offered for a limited period from Jan 1 next year to Dec 31 2018 and applicable only for housing costing up to RM300,000.00.
- Implementation of MyBeautiful New Home scheme for the B40 group offered under the National Blue Ocean Strategy (NBOS) initiative of which, RM200 million will be allocated to build initially, 5,000 units of houses priced at RM40,000 to RM50,000. The government will finance RM20,000 each to build the houses on the owners’ land, land permitted by the landowners and land awarded by state governments and the owners will pay the remaining amount in instalments
- For civil servants, 30,000 units would be built under 1 Malaysia Civil Servants Housing (PPA1M) scheme, and sold 20% below market price at between RM90,000.00 and RM300,000.00.
- Under the People’s Housing Programme (PPR), a sum of RM134 million will be allocated to the Ministry of Urban Wellbeing to build 9850 houses. A total of 11,250 PPR houses are being built to be sold at between RM35,000 and RM42,000 with an allocation of RM576 million.
- Approximately 10,000 homes to be built in urban areas for rental to youths with permanent jobs, including fresh graduates entering job market. They would be rented at a relatively cheaper rate for a duration of up to five years.
- Government-linked corporations (GLCs) and PRIMA will be given vacant government land in strategic locations to build over 30,000 affordable homes priced between RM150,000 and RM300,000, below the market prices of RM250,000 to RM400,000.
- Stamp duty on instruments of transfer of real estate worth more than RM1,000,000.00 will be increased from the current rate of 3% to 4%. from Jan 1, 2018
The Government’s incentives to make housing more affordable has received mixed response as it gives fresh graduates a firm footing in the property market however, there are concerns on the quality and location of the homes as well as transparency of government housing schemes. It is also noted that the Government did not introduce broader incentives to spur the soft property market but has proposed instead to increase stamp duty for properties above RM1,000,000.00.
Liew Siew Pen – email@example.com
Christina Chia – firstname.lastname@example.org
CCLC Corporate and Commercial ( Real Estate) has vast experience in advising on real estate transactions, housing development projects and tenancies.