Vacancy tax only for high-end properties, says minister

To avoid exacerbating the property glut, the housing and local government ministry is advising developers to build affordable homes.

KUALA LUMPUR: The proposed vacancy tax to be imposed on developers is for high-end properties priced at over RM500,000, the housing and local government ministry says.

Its minister, Zuraida Kamaruddin, said there had been many units in the past five to 10 years due to the property overhang and the ministry has been given the challenge to look at the issue.

She told the Dewan Rakyat today that the vacancy tax, which is adopted by Australia and New Zealand, was still under discussion.

With the emergence of Covid-19, she said, many developers had realised that their projections were inaccurate. She added that her ministry was now encouraging them to build affordable homes instead.

Chang Lih Kang (PH-Tanjong Malim) said the vacancy tax imposed by developed countries was aimed at curbing property speculation.

He said in the case of Malaysia, the country was facing a property glut.

“A vacancy tax will be a double whammy for the developers,” he said, adding that a feasibility study needed to be carried out before a decision was made.

Zuraida agreed that the country was facing a property glut, saying this was because the properties were priced beyond the reach of most Malaysians.

Therefore, she said, her ministry was pushing for affordable housing projects.

A vacancy tax is a tax where any property that is left vacant and unsold for a certain period of time incurs a penalty based on a percentage of the gross selling price.

According to data from the National Property Information Centre, there were 2,260 unsold condominiums in the Klang Valley as of the second quarter of 2018, of which 498 were luxury units priced at RM1 million and above.