We believed you all have heard the Budget 2014 news and what’s the impact towards property sector. Summary of some of the major highlights are:-
1.) Reviewed RPGT ::: 30% for 1st-3rd years, 20% for 4th year, 15% for 5th year and no RPGT beyond 5th year onward on citizens, whereas companies are taxed at 5%.
2.) For non-citizens, RPGT is imposed at 30% within the holding period of up to 5 years and subsequent years at 5%.
3.) Increase the minimum price of property that can be purchased by foreigners from RM500,000 to RM1,000,000
4.) Property developer will have to display detailed sales price including all benefits and incentives offered to buyers such as exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.
5.) DIBS abolished, therefore financial institutions are prohibited from providing final funding for projects involved in the DIBS scheme.
6.) Home ownership at affordable prices, an estimated 223,000 units of new houses will be built by the Government and the private sector in 2014. PR1MA will provide 80,000 housing units with an allocation of RM1 billion. The sales price of PR1MA houses are 20% lower than market prices.
7.) Private Affordable Ownership Housing Scheme (MyHome) as a step to encourage the private sector to build more low and medium-cost houses. The scheme provides a subsidy of RM30,000 to the private developers for each unit built. Among the criteria for the scheme are:
First: Build at least 20% low-cost houses and 20% medium-cost houses in a housing project;
Second: The maximum price of low-cost houses is RM45,000 and medium-cost houses is RM170,000;
Third: The minimum built-up area of low-cost houses is 800 square feet and the medium-cost houses, 1,000 square feet, with a minimum of 3 bedrooms and 2 bathrooms;
Fourth: Provide parking, surau, hall and recreational park; and
Fifth: Open to first-time buyers with a monthly household income of RM3,000 for low-cost houses and a maximum of RM6,000 for medium-cost houses.
8.) The Government will also allocate RM82 million to rehabilitate 20 abandoned housing projects involving 8,197 houses.
9.) The establishment of the National Housing Council to develop strategies and action plans in a holistic manner; coordinate legal aspects and property price mechanism; and ensure provision of homes in a more efficient and expeditious manner. The Council members will comprise Federal Agencies, State Governments, the National Housing Department, PR1MA, SPNB and the private sector.