PEPS urges the government to extend the RPGT waiver to ease property overhang issues and highlights the need for incentives like the rent-to-own scheme and support for affordable housing. Here’s their wishlist for the 2024 Budget.
KUALA LUMPUR, 11 Oct 2023 – The Association of Valuers, Property Managers, Estate Agents, and Property Consultants in the Private Sector (PEPS) has made a fervent appeal to the government to consider extending the real property gains tax (RPGT) exemption to a broader spectrum, encompassing expatriates and foreign companies.
PEPS has brought to light the multitude of challenges that currently beset the property industry, with a notable surplus in sectors such as offices, retail spaces, and service apartments.
Currently, the RPGT waiver for real estate sales, commencing from the sixth year, exclusively benefits Malaysian citizens, permanent residents, and Malaysian corporations.
To tackle the issue of property overhang, PEPS has recommended that the government take a closer look at the stipulations of the Malaysia My Second Home (MM2H) program to make it more enticing for foreign investors seeking to alleviate the property overhang problem.
Furthermore, PEPS has underscored the obstacles faced by many Malaysians when it comes to home ownership, citing rising housing loan interest rates and an economy that’s struggling to gain momentum.
In response, the association has put forth the idea of promoting a rent-to-own (RTO) scheme, particularly for PRIMA homes, which are currently experiencing an oversupply.
The RTO initiative is designed to enable those in the B40 (bottom 40 percent) income group to take their first steps toward homeownership. This stands as a crucial component of their wish list for the forthcoming 2024 Budget. Under the RTO model, tenants are given the option to purchase the property at a predetermined price at the conclusion of the fifth year.
PEPS has additionally proposed that Bank Negara Malaysia establish a revolving fund, accessible to commercial banks, to facilitate cooperation with developers in acquiring unsold housing units at discounted rates. These funds could then be allocated to homebuyers over a five-year period.
Moreover, PEPS has urged the government to consider offering a one-time grant of RM25,000 to assist first-time buyers in making the initial deposits on overhang properties.
Statistics show that, in the first half of 2023, there were 54,844 under-construction residential units remaining unsold, alongside 26,286 completed but unsold residential units, with a combined value of RM18.30 billion.
PEPS has also addressed the issue of the Industrialized Building System (IBS) and called for the expansion of IBS incentives to property developers. They have advocated for IBS as a viable alternative to conventional construction methods, particularly for affordable housing, and emphasized its potential to alleviate the current labor shortages.
Previously, government incentives for IBS were directed solely toward manufacturers of IBS building components since the 2021 Budget.