Housing prices to drop by 10%

Help for house buyers: (From left) Lim with Rehda’s Toh, Tan Hun Beng and Datuk Jerry Chan sharing a light moment after the press conference at Setia SPICE Convention Centre, Penang.

GEORGE TOWN: Housing prices in Penang are set to drop by at least 10% with the implementation of the Sales and Service Tax (SST).

Real Estate and Housing Develo­pers’ Association Penang (Rehda) hopes to bring down the overall housing prices by 10% for those costing above RM300,000 and 6% for affordable housing.

Rehda Penang chairman Datuk Toh Chin Leong said the association here would advise its members to lower the prices.

“We will talk to our members and if they can reduce by 10% immediately it would be great, if not it would apply to all new developments.

“For affordable housing, which is partly subsidised by developers, we will look at reducing the price by 6%.

“The reduction will apply for all new projects after the implementation of SST this month,” he said during a press conference held by Finance Minister Lim Guan Eng at SPICE Convention Centre in Bayan Lepas.

Toh said replacing the Goods and Services Tax (GST) with SST had reduced costs and Rehda Penang would like its members to pass on any savings to the buyers “as we should not take advantage of it”.

Lim said it was a commendable move, which he hoped would be followed throughout the country.

“It is starting in Penang and is a positive move to reduce housing prices by 10% and 6% respectively.

“It is a good start by a responsible corporate body,” he said.

On a separate note, Lim addressed former prime minister Datuk Seri Najib Tun Razak’s issues with SST citing that Najib did not have an issue with GST which was applicable to a larger group of businesses.

“We increased the SST threshold for eateries from RM500,000 to RM1.5mil.

“The former finance minister is upset that he is paying 6% for SST. When there was GST, it was also 6% but he did not say anything about the threshold being RM500,000.

“With the RM500,000 threshold they could collect RM1.2bil from 17,574 registrants.

“With the current threshold of businesses making more than RM1.5mil, there are only 4,372 registrants that imposed the 6%, meaning it only amounts to RM711mil.

“We are collecting RM500mil lesser because we want to help small-time coffee shops and restaurants.

“The reintroduction of SST to replace GST is meant to ease the people’s burden.

“When the government made the decision to replace the GST with the SST, it is because we have the people’s wellbeing as a priority.

“We put the people’s wellbeing before collecting higher revenue from taxes.

“In other words, ensuring that the people are less burdened is more important than collecting more tax revenue,” he said.

Lim said he hoped Najib would not practise economic hypocrisy.

Meanwhile, Lim said the federal government would continue to assist Kelantan if the state continues to face financial issues.

“We cannot allow a state government to be in a situation where they do not have enough money to pay their civil servants.

“The federal government will still continue to help the Kelantan government if they require help.

“I urge them to practise prudent financial accounting.

“We hope that they can manage their financial situation better.

“Rarely is a state in such a position, but we are ready to help the state even if they are not happy with us,” he said.

Lim said the federal government wanted to ensure that every state was treated fairly.

“When we talk about giving assistance to states, we will give to states that need them but when it comes to allocations, it would be given to all states equally,” he said.

“We do not want a situation like what happened to Penang when it was left out.

“Apart from road works and funding provided under the Federal Constitution, Penang was completely left out in terms of allocations from the federal government,” said the former Penang chief minister.

Lim said now Penang and Selangor were in much better financial situation than other states.

“Our priority is to help states in dire financial situations that cannot even pay their civil servants.

“There is a special fund to assist states in dire financial situations,” he said.