Stamp duty tax hike can boost sales of million ringgit homes before 2018

KUALA LUMPUR (Oct 21): Mah Sing Bhd believes the stamp duty increment for homes worth more than RM1 million will encourage advance buying of completed properties prior to Jan 1, 2018 when the hike takes effect.

Commenting on the Budget 2017 proposal Mah Sing Group managing director Tan Sri Leong Hoy Kum believes it will encourage transactions of million dollar homes before the measure takes effect in 2018.

“For those who have the intention of buying higher-end homes, it will encourage advance buying of completed properties prior to Jan 1, 2018, as buyers will be driven to make a faster purchase in order not to be charged the higher stamp duty rate,” Leong said.

Prime Minister Datuk Seri Najib Razak, in tabling Budget 2017 in Parliament today, had also announced a 100% stamp duty exemption for properties priced at RM300,000 and below.

Land & General Bhd managing director Low Gay Teck said he does not see Budget 2017 boosting the property market as a whole and foresees limited impact in helping first-time homebuyers. 

“Although stamp duty exemptions for properties priced RM300,000 and below is good news for first-time homebuyers, there are limited projects in the city and urban areas priced at this range. This will only benefit those thinking of living outside the city,” Low said.

Meanwhile, he thinks the “step-up” end-financing scheme under PR1MA announced in Budget 2017 is a right move in reducing the loan rejection rate and to help serious buyers purchase their first homes.

“But I believe the government could do more to make home owning easier, especially for first-time homebuyers. I’m sure there are more things that can be done to make owning a home easier for serious homebuyers,” Low said.

S P Setia Bhd president and CEO Datuk Khor Chap Jen also agreed that there is more the government can do to spur the soft property market.

“We noted that the government did not introduce broader incentives to spur the soft property market and has a proposal to increase stamp duty for properties above RM1 million,” Khor said.

JKG Land Bhd managing director Datuk Teh Kean Ming also said the budget did not address current market challenges.

“While I applaud government efforts in assisting the B40 (bottom 40% of households with monthly income of RM3,900 and below) to own their first homes through government agencies and GLCs and through various incentives, I am somewhat disappointed that the private sector developers, whose investments bring significant multiplier effects to the economy, were left out in the budget,” Teh said. 

He added that this budget has fallen short of the much talked about wish lists which are essential to provide the necessary push to the housing sector inertia.

However, Putra Perdana Development CEO Akmel Zurin Haron noted that, overall, Budget 2017 is a step in the right direction and will ease the financial burden of first-time homebuyers.

“Having a roof over one’s head is a basic necessity and the expected increase of people living in their own homes will also reduce social problems. At the same time, it will also spur and reactivate the property development sector which has seen stagnated purchases of the properties launched,” said Akmel.

He also noted that the housing loan increase for civil servants is certainly a good move which augurs well for both property developers as well as buyers.

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