PUTRAJAYA: The real property gains tax (RPGT) announced during the 2010 Budget will now only apply to property sold less than five years from its purchase, Datuk Seri Najib Tun Razak said.
The Prime Minister said the 5% tax would now only be imposed on property sold within five years of the date of purchase.
He said the decision would cause the Government to lose about RM200mil in revenue, adding the move was made following appeals from the Federation of Chinese Associations of Malaysia (Hua Zong) and the business sector.
“This was also decided upon as the Government wants to see a stronger growth in the property sector next year. We are willing to forgo a substantial amount of revenue so that the sector can expand and grow.
Picture for the PM: Najib receiving a portrait from Pheng during a swearing-in ceremony at a hotel in Putrajaya
“The property sector has shown signs of improvement but we feel that it requires further impetus so that it can continue to grow from strength to strength.
“We have met one of Hua Zong’s request and we hope they will respond accordingly by working even closer with the Government in the future,” he said at the swearing-in ceremony of Hua Zong’s office bearers for the 2009-2011 term at a hotel here last night.
Also present were MCA president Datuk Seri Ong Tee Keat, vice-president Datuk Seri Liow Tiong Lai and Hua Zong president Tan Sri Pheng Yin Huah.
Najib also announced that hotels undertaking additional investments to renovate, refurbish and expand their property would enjoy 60% re-investment allowance extended to 15 years, adding that the incentive was for a period of 10 years.
Najib said he also wanted to see a more active private sector, which he noted had been rather “lethargic” and had been more interested in investing abroad compared to domestically.
He also said that the country needed leaders who were moderate and pragmatic in fighting for the interest of the people.
“The Chinese can fight for the rights of the Chinese while the Malays can fight for the Malays. Likewise with other races. But it does not have to be at the expense of others,” he stressed. By TheStar
Thursday, December 24, 2009
Saturday, October 24, 2009
Property Gains Tax makes a comeback
THE Government has proposed to reimpose real property gains tax (RPGT) for gains arising from property disposal.
Based on the Finance Bill, disposal within two years of acquisition will be taxed 30%; in the third year, it will be 20%; in the fourth year 15%, while disposal within five years and beyond will still be subject to 5% tax.
The latest measure, which will come into effect in January next year, has been described as “a knock-out punch” by Deloitte Malaysia country tax leader, Ronnie Lim.
“It was merely four short sentences in the 2010 Budget speech. However, that short reference to RPGT carried a knock-out punch,” Lim said in a statement yesterday.
He pointed out that from the speech itself, many would have thought that a low rate of tax of 5% would apply to most gains arising from disposals of real property.
“Be prepared for a shock – this is not the case and the highest rate of RPGT will be 30%,” he said.
Most rates of RPGT from January 2010 will be restored to those prevailing immediately before its suspension in April 2007.
Lim said one notable difference was that the exemption from tax for disposals after the fifth year of acquisition has been removed.
“Even where a property was purchased over 20 years ago, a gain on disposal from 2010 will attract 5% RPGT (without any indexation of acquisition price to reflect current purchasing power of the ringgit),” he said, adding that a flurry of property transactions could be expected soon.
Concurring with Lim, OCBC Bank Bhd director and chief executive officer Jeffrey Chew described the measure as a counter-productive move in efforts to encourage property investments among local and foreign investors, particularly to attract real estate investment trust investors.
“Furthermore, this would make Malaysia’s property market less attractive compared to other neighbouring countries in the region despite our property prices being among the lowest in the region,” Chew said.
However, Khong & Jaafar Sdn Bhd managing director Elvin Fernandez gave the thumbs up to the RPGT, saying “it shows that Malaysia, like other Asian countries, is not for unfettered speculation.”
“The RPGT is an anti-speculative tool, not a revenue earner for Government coffers,” he added.
To promote home ownership and enhance the people’s quality of life, the Government has also proposed a scheme to allow Employees Provident Fund (EPF) contributors to utilise their current and future savings in Account 2 for home purchase.
Meanwhile, to encourage green technology in the property sector, building owners obtaining Green Building Index (GBI) Certificates from Oct 24 until Dec 31 will be given income tax exemption equivalent to the additional capital expenditure in obtaining such certificates.
Those purchasing buildings with GBI certificates from developers will be given stamp duty exemption on instruments of transfer of ownership.
The exemption amount is equivalent to the additional cost incurred in obtaining the GBI certificates. This exemption is given to buyers who execute the sale and purchase agreement from Oct 24 until Dec 31, 2014.
And to promote rehabilitation of abandoned housing projects, the Government will consider extending appropriate financial assistance to rehabilitate low and medium-cost houses based on the existing project list.
An allocation of RM200mil will be provided under the housing and local government ministry.
Under the Government’s initiative to provide housing facilities for the low and middle-income groups, the National Housing Department will provide 74,000 low-cost houses to be rented in 2010.By TheStar.
Based on the Finance Bill, disposal within two years of acquisition will be taxed 30%; in the third year, it will be 20%; in the fourth year 15%, while disposal within five years and beyond will still be subject to 5% tax.
The latest measure, which will come into effect in January next year, has been described as “a knock-out punch” by Deloitte Malaysia country tax leader, Ronnie Lim.
“It was merely four short sentences in the 2010 Budget speech. However, that short reference to RPGT carried a knock-out punch,” Lim said in a statement yesterday.
He pointed out that from the speech itself, many would have thought that a low rate of tax of 5% would apply to most gains arising from disposals of real property.
“Be prepared for a shock – this is not the case and the highest rate of RPGT will be 30%,” he said.
Most rates of RPGT from January 2010 will be restored to those prevailing immediately before its suspension in April 2007.
Lim said one notable difference was that the exemption from tax for disposals after the fifth year of acquisition has been removed.
“Even where a property was purchased over 20 years ago, a gain on disposal from 2010 will attract 5% RPGT (without any indexation of acquisition price to reflect current purchasing power of the ringgit),” he said, adding that a flurry of property transactions could be expected soon.
Concurring with Lim, OCBC Bank Bhd director and chief executive officer Jeffrey Chew described the measure as a counter-productive move in efforts to encourage property investments among local and foreign investors, particularly to attract real estate investment trust investors.
“Furthermore, this would make Malaysia’s property market less attractive compared to other neighbouring countries in the region despite our property prices being among the lowest in the region,” Chew said.
However, Khong & Jaafar Sdn Bhd managing director Elvin Fernandez gave the thumbs up to the RPGT, saying “it shows that Malaysia, like other Asian countries, is not for unfettered speculation.”
“The RPGT is an anti-speculative tool, not a revenue earner for Government coffers,” he added.
To promote home ownership and enhance the people’s quality of life, the Government has also proposed a scheme to allow Employees Provident Fund (EPF) contributors to utilise their current and future savings in Account 2 for home purchase.
Meanwhile, to encourage green technology in the property sector, building owners obtaining Green Building Index (GBI) Certificates from Oct 24 until Dec 31 will be given income tax exemption equivalent to the additional capital expenditure in obtaining such certificates.
Those purchasing buildings with GBI certificates from developers will be given stamp duty exemption on instruments of transfer of ownership.
The exemption amount is equivalent to the additional cost incurred in obtaining the GBI certificates. This exemption is given to buyers who execute the sale and purchase agreement from Oct 24 until Dec 31, 2014.
And to promote rehabilitation of abandoned housing projects, the Government will consider extending appropriate financial assistance to rehabilitate low and medium-cost houses based on the existing project list.
An allocation of RM200mil will be provided under the housing and local government ministry.
Under the Government’s initiative to provide housing facilities for the low and middle-income groups, the National Housing Department will provide 74,000 low-cost houses to be rented in 2010.By TheStar.
Monday, August 31, 2009
Property market on robust revival.
Property market on robust revivalBy ANGIE NG
Residential property powering sales in Asia
PETALING JAYA: Asia’s property market is making a strong comeback with renewed buying interest for residential property powering sales on expectation that the economic downtrend is bottoming out.
However, the commercial property market, including office and retail space, is still quite soft as easing demand has resulted in rental and occupancy rates sliding.
Bouncing back from the dampened sentiment brought on by the global financial crisis, the regional property market has shown more resilience this time around compared with the 1997 Asian financial crisis which took a heavier toll on the market.
There is increasing evidence that the US recession is bottoming out and this will stabilise the region’s economy and spur its recovery during the second half of the year.
The recovery is expected to provide a favourable basis for both residential sales and leasing markets in Asia, including Kuala Lumpur, Singapore, Hong Kong and Jakarta.
Industry observers are expecting a more robust revival in the region’s property market towards the end of the year, in tandem with a further pick-up in the global economy.
Home prices are forecast to see further upside, driven by huge liquidity in the economy as well as further rebounds in residential rents.
UOB Kay Hian in a recent regional market update said residential sales made a strong comeback in the second quarter of this year on expectations of an economic recovery and relative stability of the job market, despite a steep fall in gross domestic product growth rates, low mortgage rates and a lack of alternative high-yield investments.
“Price levels rebounded by 5% to 10% quarter-on-quarter in the second quarter after a 30% to 50% fall from the end of 2007 peak levels. As the economic recovery gains ground in the coming quarters, we expect sales momentum to pick up and price levels to firm up further on the back of improving liquidity conditions and easy financing options,” the research house added.
UOB Kay Hian said structural transformation had lent a high degree of sustainability to the current recovery.
Across the region, interest rates are drastically low and currencies are fairly stable in comparison to the situation during the Asian financial crisis.
“Household affordability levels are relatively high this time around due to the higher income levels, record low mortgage rates and stronger net household wealth. Corporate balance sheets are also a lot stronger. Furthermore, favourable migratory patterns to Asia due to its attractive long-term growth potential help support a sustainable recovery in the residential sector,” the research house explained in its report.
Market stabilisers
In the office property sector, stabilising economic conditions since June provided support to the prime office market and rentals in Asia for the rest of the year are unlikely to fall as drastically as in the first quarter 2009.
Knight Frank said on the flip side, a continued downward adjustment in occupancy costs could raise the competitiveness of doing business in most Asian cities, and provide more business opportunities for international firms and investors.
Although Kuala Lumpur still lags behind some regional cities like Singapore and Hong Kong, residential property sales have improved.
ECM Libra senior analyst Bernard Ching said the local residential market was more resilient than other regional cities and prices had not been much impacted. This compared with a price drop of about 30% to 40% in Singapore and Hong Kong, he added.
The affordable interest rate environment and lower entry cost for buyers supported property buying and investment activities during the period.
With the average mortgage base lending rate (at 5.5%) minus 2% at an all-time low, Ching said property investment was making a comeback as the preferred hedging tool against inflation.
According to Reapfield Properties Sdn Bhd president David Ong, clearer economic direction in both the global and local arenas had pushed property to regain its position as one of the leading investment instruments among Malaysians.
“Coupled with the more liberalising environment, the property market is in for stronger growth and sales performance going forward,” he noted.
Recent policy liberalisation measures to attract foreign direct investments to Malaysia’s real estate market and relaxation of rules on property purchases by foreigners have also resulted in positive effects on the property sector.
In Singapore, improved market sentiment and pent-up demand stirred private residential launch and sales activities in the first half of this year with a total 5,992 units launched.
Knight Frank said 7,374 residential units were sold during the period, exceeding the total sold in the whole of 2008 by 68%.
“With the take-up significantly exceeding the units launched, it suggested some projects which were launched before this year received strong buying interest and this allowed developers to move outstanding stock,” it noted.
UOB Kay Hian said the two upcoming integrated resorts (IR) in Singapore, which were slated to be ready by the year-end, would boost the city state’s long-term economic fundamentals.
The IR projects are expected to create 50,000 to 60,000 jobs and would directly contribute S$5.4bil to the Singapore economy, or 2.6% of GDP, by 2015.
The liquidity and openness of Singapore’s property market have contributed to attracting high net worth individuals and talented people to its shores.
This is a boon for the property market as it makes a sharp rebound from the meltdown of the past year.
Indicators are pointing to increasing possibilities of a sustained sales activity and price recovery.
These include stabilisation in the economy, which may be able to prolong homebuying sentiments for the second half of 2009.
Various findings by recruitment firms also showed that firms are more likely to hire than before.
Together with the current low interest interest rate environment, these may boost the confidence of buyers for mass-market homes who are concerned with affordability and financing issues.
“As such, homebuying sentiments may persist in the second half, although the number of new homes sold is likely to slightly decrease as the pent-up demand weaken and prices are also increasingly resisting downward corrections,” the research house added.
Meanwhile, Knight Frank said China’s property market was back on its feet following the government’s supportive measures as well as price discounts offered by developers that helped release the pent-up demand for residential properties in key cities.
Amid a lack of new residential supply in core districts, buyers are shifting to the secondary market, which saw strong rebounds in both transaction volumes and sales prices in the first half of 2009.
A more active office market is also expected in most Chinese cities in the coming 12 months with developers launching projects and acquiring land for future office developments amid a recovering market.
Its views are echoed by US research company Real Capital Analytics Inc that reported China’s commercial property transactions totalled US$31.2bil in the first six months this year following a surge in land sales after the government eased credit terms.
Capital inflow from mainland China into Hong Kong has contributed to a rebound in luxury home prices in the Special Administrative Region (SAR).
Compared with the market trough last December, Hong Kong’s housing prices have rebounded 27.2%.
According to CLSA Asia Pacific, capital continued to flow into Hong Kong, bringing the aggregate balance in the banking system to HK$211bil, as at Aug 21.
A number of local property veterans jumped on the bandwagon, engaging in batch acquisitions in The HarbourSide in Kowloon Station.
One acquired 12 units for about HK$100mil and another bought six units for HK$90mil.
In Indonesia, the disbursement of 2.5 trillion rupees in housing subsidies allocated in the 2009 budget and the finalisation of the government’s ruling on foreign ownership are expected to boost overall demand for property.
Thailand’s property prices have also recovered to its previous level due to the high liquidity in the system, low interest rates and property tax incentives.
Although high-end condominiums that cater to foreign buyers succumbed to about 30% price correction, they have since found support from wealthy domestic bargain hunters. By TheStar.
Saturday, August 29, 2009
Penang raises density for property development
Penang raises density for property development
GEORGE TOWN: The state government has raised the density for property development in Penang, which will bring down land cost and stabilise property prices, said Hunza Properties Bhd executive chairman Datuk Khor Teng Tong.
“The state government recently decided to increase the density to 280,000 sq ft in built-up area from 90,000 sq ft per 100,000 sq ft of land.The decision to increase density will allow developers to build more, hence giving consumers more choices.
“It will also help arrest the escalation of property prices over the next few years,” he said at a company briefing for the media, analysts and bankers.
On the group’s projects on the island, Khor said Hunza would finalise the design plans for a “green” apartment building project on a 4ha site soon.
The apartments would have built-up areas ranging between 1,300 and 1,800 sq ft
The project was expected to contribute strongly to the bottom line of the group for the financial years ending 2011 and 2012, Khor said.
On the Gurney Paragon project, Khor said the designs and plans for the shopping mall had been finalised and submitted to the relevant authorities for approval.
“We hope to start work by early 2010,” he said.
The seven-storey shopping mall will have a gross built-up area of 1 million sq ft, of which 650,000 to 700,000 sq ft would be lettable.
On the property market in Penang, Khor said property was currently in short supply.
“The shortage of supply is mainly due to a slowdown by developers. Not many new housing projects have started in the past one year.
“Furthermore, work on projects in the state has to stop at 6pm, which will delay the delivery of units, resulting in lower supply and the increase of property prices,” he said, adding that the local authorities needed to speed up approvals for new housing projects to meet market demand.
For the fiscal year ended June 30 (FY09), the group posted RM27.6mil net profit on revenue of RM91.8mil compared with RM48.4mil and RM245mil respectively in FY08.
Sunday, July 26, 2009
Monday, July 20, 2009
Property transactions expected to increase.
This is due to the relaxation of the FIC rules, says foreign brokerage
PETALING JAYA: Bank earnings and loans growth are likely to improve towards the end of the year, bolstered by the recent deregulation of the Foreign Investment Committee (FIC) guidelines on properties as well as easing conditions for new listings and fund-raising activities.
According to a foreign brokerage, property transactions, both residential and commercial, are expected to increase following the relaxation of the FIC rules, which should spur demand for property financing.
Higher property financing would lead to a turnaround in loans growth by year’s end or early next year, it said, noting that property financing comprised 36.4% of total loans in the banking system.
“The policy changes will create more revenue streams for Malaysia’s financial sector and reduce dependency on pure interest income,” the foreign research house said, adding that loans growth in May was underpinned by the relatively stable household loans segment, which grew 8.4% year-on-year.
 |
The recent relaxation of the FIC rules is expected to spur demand for residential and commercial property financing. |
In addition, the liberalisation would also encourage more mergers and acquisitions (M&As), as well as more capital and equity market activities, which would benefit investment banks, it said. With greater foreign ownership allowed in stockbrokers, product innovation – such as the roll-out of more varied derivative products – is likely to improve.
The foreign research house added that Malaysia’s capital market was expected to gain better access to capital and investments with the removal of the 30% bumiputra equity requirement, making it more attractive for foreign listings while supporting existing listed companies seeking to raise funds.
A local bank-backed brokerage said residential mortgages showed “no signs of weakening” as they sustained 10% growth from December 2008 to May 2009 despite the gloomy economic landscape.
This was due to progressive release of housing loans approved in the past one to two years, high savings rate of Malaysians, sustainable property transactions thanks to limited speculation, low interest rates and attractive schemes by developers, it said.
Moreover, there could be more corporate deals in the pipeline, including new listings and M&A transactions on the back of improved average daily trading value on Bursa Malaysia, it said.
This would augur well for investment banking income, including brokerage and corporate advisory fees, the research house added.
HwangDBS Vickers Research, meanwhile, said the liberalisation was “very bold measures” to improve the competitiveness of Malaysia’s properties internationally.
“The biggest winners will be developers with large exposure to the more ‘open’ districts like the Federal Territory and Penang, where the authorities would likely be supportive,” it said. By Thestar
Wednesday, July 8, 2009
Penang Property
PROPERTIES | TYPE | SIZE (sq ft) | PRICE |
THE WATERFRONT, | CONDOMINIUM | 1,475 sq ft | From RM460,000 |
TANJUNG BUNGAH | 2,900 sq ft | From RM750,000 | |
ALILA HORIZON, | CONDOMINIUM | 1,357 sq ft, 1,388 sq ft | From RM460,000 |
TANJUNG BUNGAH | 1,421 sq ft | ||
ALILA TOWNHOUSE, | TOWNHOUSE | approx 1,400 sq ft | RM460,000 |
TANJUNG BUNGAH | |||
ALILA HOMES, | 3 STOREY TERRACE | 2,400 sq ft | RM800,000 |
TANJUNG BUNGAH | |||
E & O, SERI TANJUNG PINANG, | 2 1/2 STOREY TERRACE | Land - 24' x 80' | From RM1.1mil |
TANJUNG TOKOKNG | Built Up - 24' x 60' | ||
E & O, SERI TANJUNG PINANG, | 2 1/2 STOREY SEMI-D | Land - 3,560 sq ft | RM1.6mil |
TANJUNG TOKONG | Built Up - 3,932 sq ft | ||
HILLSIDE BUNGALOW, | BUNGALOW | Land - 7,512 sq ft | RM1.9mil |
TANJUNG BINGAH | Built Up - 3,000+ sq ft | ||
CHEE SENG, | 2 1/2 STOREY TERRACE | 2,248 sq ft | RM740,000 |
TANJUNG BUNGAH | |||
TAMAN HUTCHINGS, | TERRACE | Land - 3,702 sq ft | RM880,000 |
GREEN LANE | |||
PENANG TIMES SQUARE, | CONDOMINIUM | 1,130 sq ft | RM430,000 |
GEORGETOWN | |||
TANJUNG PARK, | TOWNHOUSE | 2,500 sq ft | RM880,000 |
TANJUNG TOKONG | |||
TANJUNG PARK, | CONDOMINIUM | 2,200 sq ft | RM780,000 |
TANJUNG TOKONG | |||
MIAMI GREEN, | CONDOMINIUM | 1,050 sq ft | From RM380,000 |
BATU FERRINGHI | |||
LEADER GARDEN, | APARTMENT | 1,050 sq ft | RM270,000 |
TANJUNG BUNGAH | |||
SEAVIEW GARDEN, | APARTMENT | 2,200 sq ft | RM600,000 |
BATU FERRINGHI | |||
THE COVE, | CONDOMINIUM | 6,000 sq ft | From RM1.5mil |
TANJUNG BUNGAH | |||
SPRINGTIDE RESIDENCES, | CONDOMINIUM | 4,100 sq ft | RM3.2mil |
TANJUNG BUNGAH |
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