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HOMEBUYERS’ OUTLOOK 2015 | The Year of the Homebuyer
“One of the things we highlighted is that because of this
system, people are drawn to being dishonest in their
declarations. The RPGT requires you to prove your gains
and you do not pay only if you make a loss. Of course,
even those who are taxable have permitted expenses to be
exempted but that always caused a dispute which made the
process a lot more tedious.
“We as a Council put forward a motion to say that stamp
duty upon transfer would result in a much smoother
transition process. Additionally, the stamp duty just looks at
the purchase price as well as the assessed market price and
picks the one with the higher value, making it a far simpler
procedure than the RPGT.
“It was after this, between 2007 and 2009, that the
percentage of values increased the most. Simply put, houses
sold fast and hard. This is because everyone became more
honest about their declarations as stamp duty is paid by
the buyer and easier to assess and that is what ultimately
creates the real value of the property.
Now that we seem to be reverting to a pre-2007 RPGT model,
it may encourage people to hold on to their properties for
a longer period of time. As a result, we will not see people
rushing to sell their properties as the real value of it will be
muddied like it was before.”
“Fixing the RPGT may create a new freakonomic
effect.”
Buying properties boils down to leveraging on banks as
banks accept real values of real estate. Those real estate
values are determined by valuers who do so by virtue of
comparison. If the determined number is not the real
number, it begs the question: would there be challenges in
investors determining the value
“If a house is priced at RM3 million when similar homes in the
area are transacting at RM2 million, the bank will not give you
a RM3 million loan. The RPGT cushions this situation because
it allows people to plan and manage expectations and slows
downs the revelation of the real value of a property. This
in turn puts a stopper on property appreciation and allows
you to get the value from the bank for your loan. It is the
silencing of the RPGT and the tightening by the banks which
has made it so difficult to buy properties. Fixing the RPGT
may create a new freakonomic effect today which may
produce results later.”
“Whoever coined the term ‘affordable housing’
should be jailed.”
Singapore has the Housing and Development Board (HDB)
while the UK has public and common housing. Although
SGD700,000 is far from ‘affordable’, it is the only option
available for those looking to purchase residential property
in Singapore.
However, does affordable housing imply that every other
kind of home is out of reach In Malaysia, if one does not opt
for the 1Malaysia People’s Housing Programme (PR1MA) or
My First Home Scheme (SPR), would they be completely out
of affordable options
“There has to be a synchronicity between all
governments if housing the public is truly the
aim.”
“Whoever coined the term ‘affordable housing’ should be
jailed,” joked Chris.
“RM400,000 may sound like a steal to people in Kuala
Lumpur, but does this logic extend to Kelantan, East
Malaysia and the like The income disparity alone is enough
to dispel that.
Both the federal and state governments are pushing for
affordable housing but policies have not been tabled clearly.
A better alternative would have been a solid 10-year ‘house
the nation’ plan which addressed the problem at a level that
everyone can understand. There has to be a synchronicity
between all governments if housing the public is truly the
aim. You have PR1MA, My First Home Loan Scheme (SPR)
and People’s Housing Programme (PPR) in Kuala Lumpur
while Selangor has its own plans for public housing and
Penang recently announced an affordable housing scheme.
All I can hope for is that everyone knows what they are
doing.”
“Why is ‘affordable housing’ not a completely
zero-rated supply”
While the GST is still unclear, the list of exempt supplies has
been released and it has raised eyebrows, including Chris’.
“Residential housing is an exempt supply which simply
means that the end-user is not subject to GST but all other
levels will be taxed. Why is ‘affordable housing’ an exempt
supply and not a completely zero-rated, GST-free supply
Yes, the end-user will not be taxed but at the end of the day
the brunt will be borne equally.
“Everyone is talking about costs increasing in years to come
but this cannot be attributed solely to the GST. Inflation
as well as supply and demand are factors that also come
into play. Yes, developers can increase prices but only if all
developers do the same. However, do all developers have
the same holding power They cannot just stop building
as it is their means of survival. Yet if they price properties
beyond affordable levels and are unable to sell, they would
have to shrink their profit margins to absorb the GST cost
if they hope to break even. This will have a domino effect
across all neighbouring developments because that is how
competition works and if everything is to be equalised, the
prices will indeed go up.”
“To me, it is an admission of failure.”
To cope with the expected skyrocketing of property prices
across the board, the government has put into motion a slew
of affordable housing options. PR1MA homes, SPR, PPR and
Youth Housing Scheme are some examples.
“Granted, there have been efforts to minimise the blow to
the citizens such as the hand-out of RM200 a year for two
years to help service a loan. That is RM20,000 in total for
a loan that could hit RM450,000. Additionally, the rent-toown
scheme, to me, is an admission of failure. The simple
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