Sunday, March 7, 2021

Measures needed to encourage young homebuyers, govt told ahead of budget

iProperty says tax relief measures, a reduction in stamp duty and rental initiatives will help first-time homebuyers and rejuvenate the local property market.

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Property portal iProperty has urged the government to include policies and measures to encourage homeownership among young buyers in the upcoming budget, to be tabled by Prime Minister Muhyiddin Yassin on Nov 6.

In a statement today, it listed factors such as tax relief for first-time homebuyers which it suggested that the government reintroduce.

“The earlier homebuyers get onto the property ladder, the more time they have to benefit from the capital appreciation of their property,” it said.

It also proposed a reduction in stamp duty for first-time buyers after the Home Ownership Campaign (HOC) ends next year and an extension of the reduction to property in the secondary market.

The HOC, which kicked off last year, is a government initiative to stimulate the housing sector.

On the real property gains tax (RPGT), iProperty said the existing initiative under the Penjana package in which full exemption is given for the disposal of three home units per person should be improved.

“We hope the new budget will improve on the existing RPGT initiative by removing or loosening the limitation of disposal units per individual to encourage more confidence in property sellers.

“This will help stimulate more transactions and encourage sellers to pass on the savings from the exemption to the buyer,” it said.

It also spoke of rental initiatives to support the demand for rented homes given the uncertainty due to Covid-19.

“As more people are working from home, the need to have a comfortable and conducive living environment is now more important than ever,” it added.

“Renting provides an opportunity for people to save on accommodation costs in the short term.”

It suggested that the government also introduce an initiative that provides incentives to first-time and seasoned renters.

“On the other hand, homeowners who are finding it difficult to sell during these times could consider renting if the right incentive is in place.

“This type of initiative gives them benefits for renting. For example, earlier this year the government introduced tax deductions to landlords who provide discounts on rental rates.”

It said the government should also look into the prospect of foreign buyers, and voiced hope that the budget would revive the Malaysia My Second Home (MM2H) programme to encourage foreigners to invest in the local property market.

“In addition, the application process could be made more streamlined and investor-friendly to encourage more foreign buyers,” it said.

“Furthermore, the MM2H programme could help reduce the property overhang and the supply of unsold units in the secondary market.”

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