By Joseph Wong
The recently announced Budget 2021, which is centred around the people’s well-being, business continuity and economic resilience, has been well-received by property stakeholders.
Among the property-related takeaways that were lauded by captains of the property sector is the full stamp duty exemption on both instrument of transfer and loan agreement for the first home purchase worth up to RM500,000.
The exemption is applicable for the sale and purchase agreement on purchases that are completed from Jan 1, 2021 to Dec 31, 2025.
Knight Frank Malaysia managing director Sarkunan Subramaniam said: “This is a great move as eliminating stamp duty will lower upfront cash payments and encourage homeownership among the first-timers. As this enhanced exemption is not limited to the primary market, first-time homebuyers will have wider choices to explore listings in the secondary market.
“This proposed full stamp duty waiver complements the real property gains tax (RPGT) exemption as unveiled under the country’s Short-Term Economic Recovery Plan (Penjana) in June whereby gains arising from disposing of residential property by Malaysians (limited to three units per individual), between 1 June 2020 and 31 December 2021 are exempted from RPGT.”
Collectively, these incentives are expected to spur more activities in the primary and secondary residential markets, further supported by the current low interest-rate environment, he said.
The government will also be collaborating with select financial institutions to provide a rent-to-own (RTO) scheme, which will be effective until 2022, involving 5,000 units under the 1Malaysia People’s Housing Scheme (PR1MA) with a total value of more than RM1bil.
These units will be reserved for first-time homebuyers.
Real Estate and Housing Developers’ Association (Rehda) president Datuk Soam Heng Choon also lauded the announcement for the introduction of the RTO scheme with selected financial institutions.
“However, we hope that the programme can be extended to more than just the 5,000 units of PR1MA homes, whereby purchasers in the open market can also benefit from the scheme,” he said.
On the RM1.2bil allocation for housing for the B40 group, he said Rehda was in support of all measures undertaken by the government to provide such social housing.
“We believe that the various recipients of this allocation namely Program Perumahan Rakyat, Syarikat Perumahan Negara Berhad’s Rumah Mesra Rakyat and Program Perumahan Penjawat Awam Malaysia will provide the much-needed relief for those in need,” he said.
SP Setia Bhd president and CEO Datuk Khor Chap Jen agreed.
“We applaud the efforts of the government to help those who are in the B40 category to own a home. In line with this efforts, we hope that the government will consider to take over the responsibility to build affordable housing for the B40 as this will enable a more cohesive, consistent and efficient macro implementation and results while the developers can concentrate fully on the free market housing. Developers can contribute to a fund for this purpose,” he said.
LBS Bina Group Bhd (LBS) group managing director Tan Sri Lim Hock San noted that Budget 2021 is an expansionary and inclusive budget focused on substantial support for the economy.
“The Government projected Malaysia’s economy to rebound between 6.5% to 7.5% in 2021, supported by fiscal expansion and accommodative monetary policy.
“Rolling out construction projects in the development agenda under the 12th Malaysia Plan (12MP) will have great positive spillover impact to stimulate the economy.
“In addition, the budget also focuses on generating and retaining jobs, which is an important component to revive the economy. The Government is indeed putting in great efforts to help alleviate the pressures faced by many households, especially those in the B40 group,” he said.
LBS also applauded the review of tax incentives for manufacturers of Industrialised Building System (IBS) components, where incentives will be simplified and merged. IBS manufacturers will be given an investment tax allowance of 60% on qualifying capital expenditure incurred within 5 years to be set off against 70% of statutory income.
Lim said: “IBS plays a key role in helping developers and builders to achieve sustainable goals to build houses in high quality with greater efficiency. IBS method allows substantial savings on construction time, improves efficiency and reduces on-site labour. It also has environment-friendly advantages which would include waste minimisation, well-planned usage of green materials, noise reduction on site and increased site safety.”
Echoing much of the same sentiments, Mah Sing Group Bhd founder and group managing director Tan Sri Leong Hoy Kum added: “We welcome the government’s move to allow eligible EPF members to withdraw as much as RM500 per month, amounting up to RM6,000 for 12 months from their EPF Account 1 as this is a well-timed decision to assist those who have lost their job, especially during such a challenging and difficult time.
“The announcement on the reduction of minimum employee contribution rate for EPF, from 11% to 9% for 12 months starting from January 2021 will also increase the take-home pay for the Rakyat and ease their financial burden, allowing them to have more cash flow to spend on daily necessities.”
Ona more environmental front. the Malaysian Institute of Architects (PAM) welcomed the government’s allocation in environmental rehabilitation and protection, with more than RM500mil allocated for river cleaning, waste management, biodiversity protection and environmental monitoring.
“The additional RM2 billion budgeted for continuing the Green Technology Financing Scheme will also help to contribute to our environment rehabilitation agenda,” said PAM president Datuk Ezumi Harzani Ismail.
The digital transformation scheme would benefit the way businesses are conducted. Digital transformation through technological adoption using Building Information Modelling (BIM) will be a quantum leap to the construction industry, he said.
“PAM hopes the budget will be used not just to acquire the software and hardware, but also to develop a structured system that will be able to focus on digital transformation through the creation of leaders in digitalisation,” he said.
As a global space-as-a-service provider, WeWork’s members include enterprises around the world that view Malaysia as a key expansion market. While Budget 2021 has a much-needed focus on ensuring the welfare of the people, said WeWork Pacific managing director Samit Chopra.
“More importantly, it is about building an ecosystem that empowers collaborations across functions and industries to strengthen Malaysia’s economy and infrastructure, while creating a more vibrant landscape for businesses to thrive.
“Against uncertainties and volatilities notably for micro-businesses and small-medium enterprises, the various allocations, grants and programmes to provide financial assistance to these businesses to support their ongoing recovery is a positive step forward.”
For example, loosening conditions to allow micro-SMEs and startups to also be eligible for the additional RM150mil allocation provided under the SME Digitisation Grant Scheme and the Automation Grant, not to mention the efforts to encourage e-commerce, will also have spillover benefits that will serve to increase confidence in the national economy as a whole, he said.
With SMEs a vital backbone of Malaysia’s GDP, the inclusivity of this support highlights the confidence to advance the nation as industries look to future-proof their businesses ahead for 2021, he said.
“We believe the measures for the property sector in the 2021 Budget are overall a great effort made to realign the supply and demand of the housing market in Malaysia. Also, we are thankful to the government for listening to the industry players and Rakyat, in safeguarding the nation’s well-being, business continuity and economic resilience,” concluded Sarkunan.