Give first-time home buyers of secondary market incentives too

If first-time home buyers read enough articles on personal finance and the property market, they will understand that even if it may not be the best time ever (in our lifetime) to buy property, it is definitely a good time today.

Currently, developers are more willing to provide good deals to home buyers and the government is offering a rather substantial exemption on stamp duties.

This article, “Stamp duty calculation” gives you an idea of how the stamp duty is calculated.

Here’s one more suggestion for the benefit of first-time home buyers. This comes from the Malaysia Institute of Estate Agents (MIEA).

According to an article in theedgemarkets.com, MIEA has suggested that the Home Ownership Campaign (HOC) should also include first-time homebuyers of the secondary market, simply because this market makes up around 80% of all residential property transactions in the nation.

MIEA has suggested that incentives for properties under the HOC also be extended to the secondary market as there are more affordable homes here too.

Currently, Malaysian homebuyers are entitled to stamp duty waivers and a minimum 10% discount from developers on new properties under the HOC.

In a statement, it said, “We should allow for the exemption of stamp duties (on the instrument of transfer and loan agreement for sales and purchase) to cover the purchase of homes within the secondary market by first-time buyers.

“This will also support the government’s overall goal of encouraging home ownership.”

Actually, one major reason why buyers are more focused on new properties is because of the issue of downpayment.

In secondary markets, owners may not want to reduce their prices, thus forking out money for a downpayment becomes a major issue for first-time home buyers who have not saved enough for this expense.

However, there are definitely first-time home buyers who may prefer to buy from the secondary market simply because some of these older properties may be in locations they prefer versus newer properties which may be in newer locations.

Buying a secondary property also means that buyers can move in earlier instead of waiting for the new development to be completed.

If the focus is only on first-time home buyers, MIEA’s suggestion is indeed a good one for Malaysians.

This article first appeared in kopiandproperty.com

Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.