AS the Oct 7 date for tabling the Budget 2023 in Parliament approaches, LBS Bina Group Bhd (LBS) has a wishlist that it hopes the Government will consider for the property sector.
Although hailed as the year of recovery for many economies worldwide after two years of pandemic restrictions, 2022 is proving to be equally difficult due to worker shortages, rising interest rates and increasing raw material prices.
However, LBS lauds the Government’s efforts to alleviate homeowners’ burdens and stimulate the property sector with various initiatives, including ongoing ones like the Keluarga Malaysia Home Ownership Initiative (i-MILIKI), which runs until end-December next year.
It relinquished stamp duty for first-time homeowners with properties priced RM500,000 and below, as well as a 50% stamp duty waiver for properties between RM500,000 to RM1mil.
LBS is hopeful more can be done and proposes the Government to consider the following measures in the upcoming budget to further stimulate the property sector, which may in turn revitalise the Malaysian economy.
Home Ownership Campaign (HOC)
LBS applauds the Government’s HOC initiative introduced in 2019, which was well-received and spurred home ownership, while reducing unsold properties within the country.
First-time homeowners benefitted from the 10% purchase price reduction on homes and full stamp duty exemption.
It looks forward to the Government to reintroduce and implement HOC permanently, as that can keep buying sentiments buoyed, as affordable housing continues to be in demand.
Alternatively, the Government may wish to consider offering rebates up to 10% to first-time homebuyers to encourage and kickstart their home ownership plans.
Subsidise rising raw materials cost
According to a survey conducted by the Real Estate and Housing Developers’ Association Malaysia (Rehda), construction costs are anticipated to increase by an average of 19% this year.
Developers and contractors alike are faced with increasing cost pressure to sustain profits and house prices may increase as these are passed on to buyers.
For that, LBS hopes the Government may introduce subsidies or implement a ceiling cap on construction raw material prices to help affordable housing prices remain intact.
Lower compliance costs
As the ‘People’s Developer’, LBS places affordability at the forefront of all its developments.
That means developers end up bearing compliance costs and more, arising from development charges, land conversion premiums or strata title application.
But with increasing raw material prices, the company looks forward to the reduction of compliance costs that are associated with developing a property.
Savings from these can be passed on to homebuyers through more affordable pricing.
Greater environmental incentives
With the increasing importance of environmental and sustainability initiatives, LBS hopes the
Government can also consider providing developers with environmental grants.
This would encourage industry players to incorporate more green features into their developments, while promoting renewable energy adoption.
The Government may want to consider offering additional tax deductions, such as building owners
can enjoy income tax deductions equivalent to the additional capital expenditure needed to implement these environmental initiatives.
Ultimately, this would encourage adoption of sustainable methods and promote efficient use of energy, water and more, in a building.
Reduce foreigner purchase limit in residentials
As borders open, LBS anticipates a gradual increase in foreigners entering the country.
This may encourage other property developers to offer attractive packages at minimum prices to attract them. Currently, foreigners are only allowed to buy properties above RM1mil.
If the Government can allow the reduction of this limit to RM600,000 in all states, this would allow
developers to reduce existing unsold units, while encouraging the entry of foreign ownership.
Commenting on this, LBS executive chairman Tan Sri Lim Hock San said, “We are hopeful that
Budget 2023 will provide favourable measures for property developers.
“We believe that the proposals we have put forward would be a timely catalyst in propelling the recovery of the property sector in line with the general consensus of expecting 2023 to be a better year for Malaysia.
“Moreover, it is an opportunity for the government to assist the general public with alleviating the burden of home ownership.”
He added that LBS nevertheless looks forward to the Government’s announcement and is in full support of the efforts to help more people own their dream homes.
“With the Government taking the important decisions in steering the country towards the right direction, we believe that all industry players will work together to ensure that the incentives proposed will ultimately benefit the home buyers.”