Budget 2014: Malaysians Are Calling For Higher Stamp Duty And Taxes Imposed On Foreign Buyers And Investors

The Budget 2014 was finally unveiled on 25th October 2013. 

Report said, “Malaysia is very liberal in terms of ownership of property by foreigners. Compared to neighboring countries, property prices in Malaysia are relatively low. With the Malaysia My Second Home (MM2H) scheme, which has since attracted more than 12,000 applicants, it’s not surprising that Malaysians feel that foreign property buyers and investors are driving up property prices in the country,” 
 
Under a recent survey in the country revealed that in relation to the property market, 47% of Malaysians want to see the government deliver better control on house prices, while 31% were tie at wanting better public transportation and more low cost and affordable housing schemes introduced. Not surprising that 30% of respondents want the government to introduce more efforts to address the rising levels of crime in the country.
 
The Malaysian government is currently looking at reducing the national debt of over 53% of gross domestic product (GDP) and decreasing the country’s deficit to 3% of GDP by 2015. Industry leaders were also hoping that Budget 2014 will address the fiscal position of Malaysia to prevent further downgrades as made by global rating agency, Fitch Ratings.
 
“While the move to increase the RPGT was to curb speculation and to discourage people from buying and selling houses for quick profit, the current levels have not been effective. According to some market analysis, in the last two years alone, prices of houses in some areas of the Klang Valley have increased by between 15% and 30%,” some said.
 
In relation to property prices becoming

increasingly difficult for property buyers under the 30 age bracket, close to half of respondents would like the government to introduce other effective schemes by taking into account affordability, inflation and review of current income levels and then introduce other effective schemes.
 
“With property prices averaging around RM700, 000 in the Klang Valley, it is becoming increasingly difficult for the younger generation to afford a property. So it is not surprising that the people want the Malaysian government to step up their efforts in making housing more affordable,” 
 
When asked how far they think the government should go in terms of managing the property market, close to half (44%) expressed that they want the government to maintain property prices at an affordable average while 35% want to see measures to slow down the rate of increase in property prices since a rise in inevitable.
 
The House Price Index by the National Property Information Centre showed that in 2011 and last year, the house price index had recorded the highest increase in the last five years, especially in Selangor, Kuala Lumpur, Penang, Pahang, Sabah, Perak and Terengganu.
 
As part of the government’s efforts to bring down the fiscal deficit to 3% by 2015 and create a balanced budget by 2020, 60% of respondents felt that the implementation of the Goods and Services Tax (GST) will not help.
 
“Whatever it is Budget 2014 has unveiled, in relation to the property market, Malaysians are calling for better home financing policies, better housing schemes and for the government to make it easier for low-and medium-income earners to own affordable houses.