THE property sector is hoping that the government will extend its incentives, especially the stamp duty waiver, to a wider range of properties in Budget 2004.
The Real Estate and Housing Developers Association Malaysia (Rehda) said those provided to the sector in the past few years in the form of off-budget incentives under the various government stimulus packages had been immensely effective in boosting the industry's sales and performance.
The government’s economic package announced in May focused mainly on the housing sector in terms of waiver of Real Property Gains Tax (RPGT) and stamp duty on purchases of houses costing not more than RM180,000 for one year from June 1.
Rehda president Datuk Jeffrey Ng said if the stamp duty waiver was extended to residential properties priced at more than RM180,000 and for purchase of abandoned non-residential properties it would encourage a broader base of eligible house buyers to buy and thereby further stimulate the residential sector.
“Going by sales done at the Malaysia Property Expo (Mapex) in April, we noticed a trend of sustained sales support comparable to the levels achieved during the non-stamp duty waiver periods. Since the outbreak of the Severe Acute Respiratory Syndrome was contained and the announcement of the new strategies package in May, our members have reported improvements in sales and buying sentiment,” he told StarBiz.
Ng also proposed tax exemption for Real Estate Investment Trusts (REITS) to encourage this new form of investment instrument in the financial capital market.
He said to encourage participants of the Malaysia My Second Home scheme to purchase properties, existing terms and conditions of eligibility must be further liberalised, such as extending the length of visa stay permit up to 10 years without the need for annual validation or renewal after 5 years, provided that participants still owned the property.
Glomac Bhd group executive vice-chairman Datuk Richard Fong has urged the government to consider allowing income tax deduction on housing interest for all first-time home buyers as a catalyst for the industry’s long-term growth, especially when the economy is doing well and the income per capita of the population rising.
Fong said to support the information and communications technology (ICT) sector, telecommunications providers such as Telekom and Maxis should work together with developers to provide the infrastructure such as telephone lines to new housing areas.
“Having easy ICT access is also in line with the Selangor Draft Structure Plan of dispersing the population, which is currently centred in the Klang Valley, over the next 18 years. The government’s future plan means another 259,000ha in Selangor would be developed,” he said.
Fong also lauded Housing and Local Government Ministry’s initiative to implement speedier approval for Certificates of Fitness starting from October and hoped the relevant authorities and agencies would respond warmly to the Cabinet’s decision for an effective and judicious implementation of the initiative.
Master Builders Association Malaysia (MBAM) president Lau Mun Cheong, meanwhile, said the construction industry was also in need of some pump-priming measures from the government to generate new jobs “in order to use the excess capacity in the industry.”
Lau said the construction industry was still fragile as reflected in Bank Negara’s Annual Report 2002 where its real gross domestic product (GDP) contribution was expected to drop to 1.9% this year from about 2.3% last year.
“Procurement procedures should also be standardised to ensure experienced contractors with good track records are awarded tenders for projects. It is also better for government projects to be broken down into smaller packages to ensure that smaller contractors also get to participate,” he added.
In a memorandum submitted to Budget Dialogue 2004, MBAM urged the government to establish a clear and definite procurement policy so that local builders would be able to structure themselves in line with the policy.
“With its linkages to more than 140 upstream and downstream industries, it is the fervent hope of MBAM that the government will create a stable flow of jobs to enable genuine quality builders registered with Construction Industry Development Board (CIDB) to be awarded projects to achieve sustainable economic growth for the nation,” it said.
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