The Malaysia Prime Minister Najib Abdul Razak unveils Malaysia Budget 2014 just on 25 October 2013. Summary of some of the major highlights in property sector including:
1. Reviewed (Real Property Gains Tax) RPGT: 30% for 1st-3rd years, 20% for 4th year, 15% for 5th year and no RPGT beyond 5th year onward on citizens. For non-citizens, RPGT is imposed at 30% within the holding period of up to 5 years and subsequent years at 5%.
2. Increase the minimum price of property that can be purchased by foreigners from RM 500,000 to RM 1,000,000
3. Property developer will have to display detailed sales price including all benefits and incentives offered to buyers such as exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.
4. Developers interest bearing scheme (DIBS) abolished, therefore financial institutions are prohibited from providing final funding for projects involved in the DIBS scheme.
5. PR1MA will provide 80,000 housing units with an allocation of RM 1 billion. The sales price of PR1MA houses are 20% lower than market prices.An estimated 223,000 units of new houses will be built by the Government and the private sector in 2014.
6. Private Affordable Ownership Housing Scheme (MyHome) as a step to encourage the private sector to build more low and medium-cost houses. The scheme provides a subsidy of RM 30,000 to the private developers for each unit built. Among the criteria for the scheme are:
- Build at least 20% low-cost houses and 20% medium-cost houses in a housing project;
- The maximum price of low-cost houses is RM 45,000 and medium-cost houses is RM 170,000;
- The minimum built-up area of low-cost houses is 800 square feet and the medium-cost houses, 1,000 square feet, with a minimum of 3 bedrooms and 2 bathrooms;
- Open to first-time buyers with a monthly household income of RM3,000 for low-cost houses and a maximum of RM6,000 for medium-cost houses.