Budget 2019: Can it solve some of Malaysia’s housing woes?
KUALA LUMPUR, Oct 22 — Owning a home is a priority for many Malaysians who await each year to see if the federal government will introduce measures in the Budget to make such a dream more achievable.
Ahead of the Pakatan Harapan (PH) government’s Budget 2019 in November, Malay Mail looks at the wishlist of two key groups: those who want to purchase a house and those who build them.
Make it affordable
The National House Buyers Association (HBA) has long warned of a looming housing crisis and a potential “homeless generation” of Malaysians unable to afford owning homes.
HBA defines affordable homes as those sold at between RM150,000 and RM300,000 (as opposed to below RM100,000 for low-cost houses), with a minimum two-bedroom layout with at least 800 sq ft of space, and in an accessible location with good public transport links and public amenities.
Here’s a list of HBA’s proposals on what the government can do.
Tax property speculators to curb rising prices
Noting that most Malaysians would be able to afford two homes at most, HBA proposed higher stamp duty on buyers from the third property onwards and a 30 per cent Real Property Gains Tax (RPGT) if an owner with more than two pieces of property sells within the first 10 years of taking vacant possession.
Incentivise developers to build affordable housing
The government can reduce costs for affordable homes via measures such as through fast-track project approvals that would allow for quicker sales and better cash flow and making utility companies bear the cost of the last-mile connectivity for services such as electricity, water, sewage that developers had been forced to pay and pass on to homebuyers.
The group said land acquisition costs (land alienation prices and land conversion premiums) could be lowered if at least 70 per cent of the land is for affordable housing.
It also proposed tax exemptions on up to 70 per cent of profit from affordable housing projects.
Rent-to-own scheme for affordable housing
The HBA urged Putrajaya to form a task force involving federal and state governments to introduce nationwide rent-to-own scheme for B40, M40 income groups who make up 80 per cent of the Malaysian population
Introduce a price control mechanism for affordable homes
It proposed a maximum limit on profit margins for affordable housing developers, which will result in lower prices charged by those in the housing industry including sub-contractors, suppliers and vendors.
“If the government can control the prices of essential goods such as rice, sugar, cooking oil and other daily essentials, it should also be able to control prices of houses, more so for the affordable housing category,” HBA said, noting that the government was already regulating prices for construction materials such as cement, sand and steel; as well as professional fees for architects, engineers and surveyors.
Separately, the Malaysian Trades Union Congress (MTUC) proposed that the Employees Provident Fund direct RHB Bank and MBSB Bank — where the retirement fund holds stakes of 40.7 per cent and 65.4 per cent — to provide housing loans without charging interest to B40 and M40 workers.
Help us make it affordable
The Real Estate and Housing Developers’ Association Malaysia (Rehda) proposed for banks to make it easier for Malaysians to obtain loan approvals and offer higher margins of financing.
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