LBS proposes measures to revive the property market

‘The government can consider some suggestions from this wish list to revive the property market,’ says Lim.

LBS Bina Group Bhd, which continuously strategises to help the property industry amidst the Covid-19 pandemic, has unveiled its wish list for Budget 2022 which will be tabled in Parliament on Oct 29.

A strong housing market will have a positive multiplier effect on the economy. As such, LBS proposes to the government several measures in Budget 2022 to stimulate the housing economy as the nation progresses towards recovery.

Permanent implementation of the Home Ownership Campaign (HOC)The HOC has been a welcome boost for property developers in generating property sales as buyers grew more cautious due to the pandemic.

As the country returns to pre-pandemic normality, LBS has witnessed the positive impact of the HOC on the property market and hopes the government will consider a permanent implementation of the HOC along with full stamp-duty exemption for up to the first RM1mil of the property’s purchase price.

This will ensure the entire supply chain of the construction and property development industry will continue to carry on without disruption while buying sentiment remains.

Relaxation of requirements for Malaysia My Second Home LBS has been a proud supporter of the Government’s MM2H programme as it has created a positive effect in attracting foreign nationals to settle in Malaysia.

The group hopes that the government will consider:

> Lowering the qualifying minimum income for an applicant back to the original RM10,000 per month.

> Reducing the minimum amount of liquid assets to RM500,000 compared to RM1.5mil.

> Reducing the minimum amount of fixed deposits in a Malaysian bank account to RM300,000 compared to RM1mil.

> Maintaining the duration of the MM2H pass at 10 years.

LBS believes these proposals are sufficiently stringent to attract skilled foreign nationals and ensure the continued success of the MM2H programme.

Incentives for adoption of Industrialised Building System

LBS is aware that timely handover of vacant possession for properties is an important obligation on developers’ part. Therefore, it advocates the usage of the IBS, a system which has been proven to reduce construction time and cost without compromising on housing quality.

LBS lauds the government’s initiatives in encouraging the use of IBS by providing investment tax allowances of 60% on qualifying capital expenditure incurred within five years, which can be offset against up to 70% of the statutory income of the company.

The group, however, hopes that the government will consider extending these tax incentives to include existing IBS players, rather than ring-fence the incentives to new players only.

With this, LBA would be able to channel the further savings to facilitate expansion and increase their research and development into growing its use of IBS technology.

Reduction in compliance costsDevelopers have seen their business impacted by the pandemic, with work being halted intermittently due to government restrictions.

LBS therefore hopes that the government will introduce measures to assist developers.

For instance, LBS wishes for the government to reduce compliance costs borne by developers by reducing development charges, land conversion premiums or strata title application.

Any savings from these measures would be hugely beneficial and can be passed on to homebuyers via a more affordable pricing point.

Incentives to counter the rising cost of materialsThe fluctuations and rising cost of building materials such as steel and cement will likely have an adverse impact on the cost of housing.

To illustrate, the price of steel rose between 25% and 30% over a two-month period from November 2020 to January 2021. The price volatility increases the pressure on contractors and developers as they are faced with additional costs from both building materials and SOPs compliance costs.

To counter this, LBS hopes that the government will consider implementing a levy to reduce costs or introduce strict control prices over building materials.

LBS opines that this will ensure developers do not pass on the increased cost of materials to homeowners.

Reduction in minimum threshold for foreign property ownershipThe current property overhang situation is a concern for developers.

To ease this, LBS hopes that the current price threshold for foreigners seeking to buy a property in Malaysia be reduced to RM500,000 for all states.

Moving forward, this enables property developers with high unsold inventories to free up cashflow for other property developments.

Waiver of levy on foreign labour in the construction sectorThe construction sector relies heavily on foreign labour. However, the costs associated with bringing in foreign labour may be high.

Therefore, LBS hopes that the government will consider a waiver on the levy for foreign workers.

This would help reduce the construction cost which in turn will reduce the development cost of properties thus making homes more affordable.

“We hope that Budget 2022 will consist of the right stimulus policies to improve the property development sector as well as support homebuyers’ quest to purchase property,” commented LBS executive chairman Tan Sri Lim Hock San.

“With the pandemic and implementation of movement restriction, the market has been sluggish and caused uncertainty among investors.

“Thus, with the right aid from the Government, this could lead to an increase in home ownership for Malaysians.”

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