Mah Sing is optimistic about property prospects in 2023 as there are signs of a healthy recovery in the real estate market across all segments. In view of the impending announcement of Budget 2023, we hope that the government will take additional steps to increase homeownership by reviving the Home Ownership Campaign (HOC) as the campaign has proven to be vital in helping home buyers to secure their home. We also propose other measures including giving a one-off grant of RM30,000 to eligible first-time home buyers, offering fixed rate financing and step-up financing, and introducing tax exemption for end-financing interest incurred during construction.
Foreign home buyers make up a small percentage in Malaysia. In order to inject some excitement in the foreign property market and attract more foreign home buyers to invest in our country, we hope the government will consider lowering and standardising the minimum threshold for foreign property ownership to RM600,000, as well as incorporating more appealing policies into the Malaysia My Second Home Programme (MM2H) and promote Malaysia Premium Visa Programme (PVIP).
We commend the government’s efforts to revitalise the country’s economy to improve people’s well-being, particularly Rakyat’s income and social protection, as well as business competitiveness. We hope that the government will consider waiving or lowering taxes and levies on construction material until prices stabilise, as well as offer attractive incentives for developments that incorporate green features. We hope the government can incentivize developers which use the Industrialised Building System (IBS) and Building Information Modelling (BIM).
As the property industry has a critical multiplier effect on more than 140 industries, this will have a broader impact on the overall economy. We hope that the government will consider the following as part of its effort to stimulate more activity in the property sector:
*Enhanced Measures to Ease Home Ownership for First Time Home Buyers, and Revive Home Ownership Campaign (HOC)
We hope that the government will implement additional measures aimed at first-time home buyers, specifically in home financing, to increase home ownership. Impactful measures would include:
Reviving the HOC as the campaign has proven to be vital in helping home buyers to secure their home while reducing the housing overhang situation.
A one-off First-Time Home Buyers’ Grant of RM30,000 for properties priced up to RM500,000 and/or to reactivate the MyHome Scheme programme to eligible purchasers.
Lower, fixed rate financing for first-time home buyers, for properties priced up to RM500,000.
Step-up financing allows middle-income buyers more time to improve their income during the first few years of home ownership.
Higher margin of financing up to 100% for first properties to assist the M40 and B40 groups affected by the pandemic.
For all buyers, we propose restoring the maximum loan tenure to 40 years, referring to gross income rather than net income for loan applications and allowing down payments to be made directly from EPF Account 2.
*Tax exemption for interest incurred during construction
We hope that the government will consider introducing tax exemption for end-financing interest incurred during construction. This may be a good way to promote home ownership as there will be direct tax savings for homebuyers.
*Reduce and standardise minimum threshold for Foreign Property Ownership to RM600,000
The current minimum threshold for foreign property ownership varies according to states. We hope that the government can review and standardise the minimum threshold to RM600,000 across all states. With the current currency rate, it will attract foreigners to invest in tangible investments.
*Incorporate Appealing Policies into Malaysia My Second Home Programme (MM2H) and promoting Malaysia Premium Visa Programme’s (PVIP)
We would like to propose to the government that more appealing policies be incorporated into MM2H and promote PVIP, in order for Malaysia to remain competitive in encouraging more eligible foreigners to stay and invest in Malaysia.
We are hopeful the below proposal for MM2H to be considered:
Lower the qualifying minimum income, liquid assets, and fixed deposits instead of a drastic increase currently.
Impose different classes of applications, tailored for various foreign applicants.
All existing MM2H pass holders should not be affected by the new rules.
The duration of the MM2H pass shall remain at 10 years.
*Waiver or reduction of duties on construction materials until prices normalise
We hope the government could consider lifting the taxes and levies imposed on imported construction materials. The construction material costs such as steel, aluminium, cement, concrete, glass, copper and timber, are anticipated to increase this year. This will increase the challenges on property developers, on top of other challenges such as inflationary pressures and economic uncertainties.
*Resolve labour shortage issue
We thank the government for introducing the Foreign Worker Centralised Management System (FWCMS) and believe that the industry will soon be able to have access to more workers in a timely manner. Meanwhile, we hope that the Labour Recalibration Programme 2.0 (RTK 2.0) recalibration fees can be reduced from the current RM1,500. Savings from a lower fee can be passed on to potential homebuyers in the form of lower house prices.
*Incentives for developments incorporating green features
In Budget 2022, the government announced that Malaysia is moving towards becoming a carbon-neutral nation by 2050. We hope that the government will continue to expand green building development and consider providing small grants to developers to encourage industry participants to incorporate more green features into their developments and to use renewable energy sources such as solar panels. These measures will contribute to the goal of becoming a carbon-neutral nation by 2050.
*Incentives for adoption of Industrialised Building System (IBS) and Building Information Modelling (BIM)
Malaysia’s government Budget 2021 extended the tax incentive given to manufacturers of IBS components for another five years, until December 31, 2025. We hope that the government will consider extending very attractive incentives to property developers who adopt IBS and BIM when constructing developments, particularly affordable residential developments. This will encourage more property developers to adopt IBS and BIM, resulting in higher quality developments, reduced labour dependence, increases site neatness, and increased productivity.
