Experts call for the loosening of taxes in order to help boast the market.
Every year the Real Estate and Housing Developers Association (Rehda) compile a list of all the items they want the government to consider in order to aid the property industry. This year at the top of Rehda’s list is a request for stamp duty on properties to be waived. A plea made assuming that the government is in a position to be able to afford to do this.
Stamp Duty is due to be increased from 3 to 4 percent for any property priced over MYR 1 million as of 1 January 2018. An amount that pushes up the costs associated to owning property. Developers are wary of this hike that they fear will dampen transaction numbers.
As of 1 April 2015 developers are also subject to Goods and Services Taxes of 6 percent for construction materials and services. Whilst residential properties avoid this tax, the eradication of stamp duty will help make properties more affordable. This will enable more first time buyers to reach the first rung of the property ladder. Subsequently having a knock-on effect to the success of developers.
Additional property taxes include Real Property Gains Tax (RPGT). This tax is applicable to properties that are sold within six years of when it was purchased. A tax to deter investors from flipping properties that contribute to rising property values.
Due to rising property prices the age of children moving out of home has risen compared to previous generations. This is because salaries are not rising at a similar rate as property taxes. Additionally more parents are having to help secure property for their children by providing a deposit for the purchase. Prime Minister Najib Razak is trying to help this with his announcement of eradicating stamp duty for first time buyers should they purchase property under MYR 300,000.
