Developer interest bearing scheme proposed for first-timers

PETALING JAYA: Mah Sing Group Bhd is proposing to the Government to bring back the developer interest bearing scheme (DIBS) for first-time home buyers.

The developer is also suggesting a review of the real property gains tax (RPGT) as among several measures to boost the sector.

“The property industry has a larger multiplier effect than other industries. Hence, stimulating the industry should therefore have a larger impact on the wider economy,” group managing director Tan Sri Leong Hoy Kum (pic) said in a statement yesterday.

As part of its wishlist for the upcoming Budget 2016, Mah Sing requested that DIBS be reinstated, but only for first-time homebuyers. This, it said, will make it easier for genuine homebuyers to lock in properties at current prices.

“We laud the Government’s continuous initiatives to encourage home ownership, especially for these buyers,” he said.

The property company also suggested that the Government conduct a review of the RPGT to encourage property investments.

“We are also aware of the government’s concerns about the affordability of properties,” he added.

Leong said total property transactions in Malaysia for the first half of 2015 fell 3.5%, while the value declined 6%.

He said that there was minimal speculation in the market as the number of borrowers with three or more outstanding housing loans made up for only 3% of total borrowers with housing loans.

In Budget 2014, the Government increased the RPGT on properties sold within the first three years of purchase to 30% from 15% previously, and also abolished the DIBS as a measure to curb the speculative market.

“In 2010, the government allowed a flat rate of 5% gains tax across the board and a minimum exemption of RM10,000 gain. Many lauded this move as it has greatly encouraged property transactions,” Leong said.

Mah Sing also urged Bank Negara to relax the lending requirements for first-time homebuyers as well as second-time home buyers looking to upgrade due to bigger families. Easier access to end-financing will assist genuine property purchasers, it said.

It added that the Government should increase the housing grant for youths to compensate for the implementation of the goods and services tax and higher cost of living.

The Government introduced the Youth Housing Scheme in Budget 2015 providing assistance to first-time homebuyers, such as a RM200 monthly financial assistance, 50% stamp duty exemption on transfer documents and loan agreements as well as a 10% loan guarantee.

The company also suggested a full exemption of stamp duty for those buying their first residential property to reduce the transaction cost, compared with the current 50% exemption.

“We would also like to urge the Government to extend the exemption or lower the stamp duty rates for all property transactions,” said Leong.

Furthermore, Mah Sing hopes the Government will consider further reducing personal income tax for the middle income group, so the rakyat would have more disposable income to invest in the property market.

It also suggested changing the status of low-cost housing to affordable housing, in order to allow the lower and middle income groups access to homes with better amenities and facilities.

“Currently it is adopted in Selangor. We hope to see a nationwide initiative towards building homes that meets the rakyat’s needs,” it said.

Source: The Star Online

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