Johor move to cool down property market

Posted: October 8, 2013 in Uncategorized

The Johor government will start to charge processing fee on foreigners buying houses in the state based on the property value beginning next year.

The announcement may be a prelude to the much anticipated announcement of measures to cool down the property sectors in the upcoming government budget.

One of the expected measures is the imposition of a higher real property gains tax to curb excessive speculation, which is one of the reasons blamed for the hike in property prices in recent years.

A Bernama report yesterday quoted state executive councillor for housing and local government Datuk Abdul Latiff Bandi as saying the new condition from the current requirement to pay only a RM10,000 fee is to protect the Johoreans’ interest.

The processing fee between 4% and 5% of the property value purchased indirectly enables the state government to control the sale of properties to foreigners, he said.

“For instance, foreigners buying a property worth RM5 million will have to pay only RM10,000 as processing fee currently. From next year, they have to pay based on the property value,” the report quoted Abdul Latiff as saying after he opened a seminar on Green Industry 2013 yesterday.

The report quoted Abdul Latiff as saying that the proceeds from the fee will be used for projects and programmes towards developments in the state for the people.

“We will table the new condition in the budget sitting of the state legislative assembly, which will sit soon, for approval,” he said.

He also said the state government will also review the rental rate to obtain the temporary occupation licence for the sites of billboards.

“There are more than 1,000 billboards in 16 local authority areas in the state. At present, the owners are paying only RM100 rental for the sites for a year. The rental will be increased to an appropriate rate,” he added.

On the other hand, Malaysia Property Inc (MPI) has urged Malaysian property developers to embark on an aggressive marketing campaign to attract foreigners to buy into local properties as a way to increase foreign investment in the country.

An earlier report by The Malaysian Reserve quoted MPI GM Veena Loh (picture) as saying that the number of foreigners buying Malaysian property has been stagnant in the past few years.

According to MPI’s data, Johor has seen an increase in foreign buyers from 12% in 2010 to 14% in 2012 due to the emerging Iskandar Malaysia project.

Foreigners made up just 7.2% of buyers in 2010 and 7.3% in 2012. Loh said most of these purchases were for business reasons and that there is ample room for improvement.

“We do not have a specific target on the number of foreign buyers…however, the current number is very minimal and there is room for more to invest in,” she said at a property developer forum held in regards to Budget 2014 in Petaling Jaya last month.

Loh said MPI, which matches up foreign investors with real estate opportunities, has been marketing Malaysian property in Indonesia, Japan, Singapore, China, India and South Korea.

“So far, the results are very promising especially for property in hot areas such as Penang, Johor, Kuala Lumpur and Selangor,” she said. However, in Penang, the percentage of foreign property buyers decreased from 10% in 2010 to 6.7% in 2012.

source

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