PETALING JAYA: Putrajaya should postpone the increase in stamp duty on properties priced at over RM1 million as the property market isn’t ready for it, says the Real Estate and Housing Developers’ Association Malaysia (Rehda).
When tabling Budget 2017 last October, Prime Minister Najib Razak had announced that stamp duty for such properties would be increased from 3% to 4%.
Speaking to FMT, Rehda patron Ng Seing Liong said the increase in stamp duty was supposed to come into effect this year but had been postponed, reportedly to Jan 1, 2018.
With the year drawing to a close and amid growing speculation that Putrajaya will increase the stamp duty as planned, Ng voiced concern over the impact the increase would have.
“It’s still not the right time to increase the stamp duty so soon after the implementation of the goods and services tax (GST), which has already impacted the prices of homes.”
Ng said although the sale of residential properties wasn’t subject to the GST, building materials and construction services were. This, he said, pushed up construction costs which were reflected in the prices of homes.
Yesterday, Rehda presented its Property Industry Survey for the first half of 2017, in which it noted that 40% of the 153 developers surveyed said they had been greatly affected by the current economic scenario.
According to the survey, the cost of doing business in the property industry increased to 10% for nearly half of the developers polled.
Former Melaka Rehda chairman Anthony Adam Cho said a 1% increase in stamp duty would affect the sale of million-ringgit properties, which was already slowing down.
“If a home costs RM1 million, a 4% stamp duty is RM40,000. If the home is RM2 million, that’s RM80,000. That’s a lot of money.
“If you look at Rehda’s latest Property Industry Survey, you’ll see that for the first half of 2017, 28% of unsold units fall in the RM1 million and above category, so an increase in stamp duty would be bad.”
Meanwhile, property expert Ernest Cheong said an increase in stamp duty could “kill” the property market.
“Currently, many people aren’t attracted to buying property, whether they can’t afford it or don’t think it’s the right time.
“The low stamp duty remains an incentive at a time when costs of living is going up.”
At the very least, Cheong said, the government should maintain existing stamp duty rates for the next five years.
Early this year, a news report said data from the National Property Information Centre showed an increase in unsold residential homes in Kuala Lumpur valued at above RM1 million in the first quarter of 2015 compared to a year before.
At that time, Cheong had called for the introduction of measures to encourage foreigners to buy up luxury houses to prevent the collapse of the property market, which he said could trigger a financial crisis.
Last year, Rehda national treasurer Muztaza Mohamad said he hoped the government would consider waiving the stamp duty if its cash flow was “okay”.