theSun Property November 2015

ON FRIDAY

NOVEMBER 6, 2015

ONTINUING

from last

week’s article, National

House Buyers Association

(HBA) president, Chang

KimLoong, raises more concerns

and issues pertaining property,

some which were not taken up in

next year’s budget.

Pleased by the fact that the

government has looked into

curbingmeasures which it

implemented in the 2014 budget

like increase in RPGT (Exit Costs),

LTV and prohibition of DIBS,

Chang says: “These have achieved

its objectives in partially deterring

speculators and ‘bogus’ house

buyers. It has also brought some

sense of orderliness to the housing

arena. However, HBA have

appealed to the government to

adopt further measures to be

implemented in Budget 2016.”

These are outlined below.

A] Increase in entry cost for

owners of multiple properties

Chang revealed that the

association has requested that the

government increase the entry cost

for owners of multiple properties

via the stamp duty charges on the

transfer of a property. HBA’s

proposal refers:

The current allocation refers - if

the value of the first property is

RM100,000, stamp duty is at 1%;

properties valued between

RM100,000.01 and RM500,000 at

2%; and those valued RM500,000.01

and thereafter at 3%.

“The above calculations

disregard the number of properties

an owner already has. As a result of

low entry cost to acquire a piece of

property, speculators have taken

advantage of the low stamp duty

regime, and are therefore able to

acquire multiple properties at the

same time. This deprives genuine

house buyers the opportunity to

acquire those houses,” Chang

explains.

He recommends that the

current stamp duty regime be

maintained for the first two

properties held – one for the

owner’s own stay

and the other, perhaps as a long-

term investment, but says, “Stamp

dutymust be increased for

the third and subsequent

properties held.”

HBA’s recommendation:

first two properties based on

current rate as above;

third property – flat 5%on the

value of the

property;

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raise fears plus dimhopes of many

house buyers – those who have

bought into such projects, and

potential earnest buyers.

“The presence of this on-going

‘thorn in the housing industry’ does

not bode well for the wellbeing of

affected buyers, nor the reputation

of the UrbanWellbeing, Housing

and Local Government Ministry,

being the regulatory body and

approving authority,” says Chang.

He also raises issues associated to

this “bug in the system” and the

subsequent “mess” it induces.

These include a dilapidated

environment; unnecessary

hardships to the lives of those who

have bought into such abandoned

development projects having to

still service their bank loan

instalments and so on.

“Inmany cases unless the

projects are successfully revived,

there will be no end in sight as to

how long they have to bear their

ordeal. There is no solution to save

abandoned housing projects except

to seek out the intervention of the

government, using taxpayers

money and seek the so-called

‘white knights’ to rescue those

abandoned projects,” Chang

shares.

Continuously lobbying for the

BTS10:90 system to be enforced to

curb the abandoned housing

projects matter, Chang once again

reminds the government that,

through its then housingminister

Datuk Chor Chee Hueng in

February 2012, it once said that the

BTS 10:90 systemwould be

mandatory by year 2015. “This was

also recorded in the Parliament

Hansard in year 2013 in the Dewan

Rakyat. Under the BTS 10:90

system, house buyers only need to

fork out the initial down-payment

of 10%when booking a house and

do not need tomake any further

payment until the vacant

possession of the property is

delivered to themwhereupon the

balance 90%will be paid,” Chang

reiterates.

Not only does Chang deem this

systemmore orderly where errant

housing developers are concerned,

it is a far safer mode of delivering

houses which will “drastically if

not totally eliminate cases of

housing projects being

abandoned,” Chang adds.

To the disappointment of many,

there was nomention of BTS10:90

in the recent budget. Instead, the

current housingminister was

quoted saying earlier this year, that

he would propose the allowance of

both the BTS10:90 system to co-

exist with the “Sell-Then-Build”

concept, allowing the developers

free rein to choose.

“This has drawn flak and

adverse criticism from the house-

buying public, the consumer

associations, especially victims of

abandoned projects and unlicensed

developers. We still wait and hope

to see if the government will hold

true to their slogan “Janji DiTepati”

whichmeans promises fulfilled.

Follow our section next week

for more interesting articles on the

property industry.

fourth property – flat 7.5%on

the value of the property; and

fifth property – flat 7.5%on the

value of the property.

Based onHBA’s definition of

affordable property (RM300,000)

and Rehda’s definition of it

(RM1,000,000), the

table below clearly

shows that HBA’s

proposal on

stamp duty

will not affect

the majority

of the rakyat

who canmostly afford to buy only

two properties max.

B] PR1MA

HBA reiterates its concerns on the

political accountability of the

PR1MA scheme. It questions why

the scheme does not fall under the

HousingMinistry, which has the

appropriate experience. It instead

comes as a unit under the

prime minister’s

department which HBA

deems, has been

operating in relative

obscurity frompublic

scrutiny and has some high level

protection on the aspect of

affirmative action.

Some of HBA’s other concerns

pertaining PR1MA include:

Why isn’t PR1MA under the

current legislation that regulates

housing ie: Housing Development

(Control &Licensing) Act, 1966

and its regulations?

Why shouldn’t there be “safety

nets” like the imposition of

mandatory Housing Development

(Project) Account?

Why should the statutory Sale &

Purchase Agreement in Schedules

‘G’, ‘H’, ‘I’ & ‘J’ be used?

On the above, Chang says:

“Without PR1MA being catalogued

under the Housing Development

(Control &Licensing) Act (HDA),

PR1MA developers will then not

need to be licensed (to build) and

there is no need for the

Advertisement & Sales Permit.

“Thus, buyers who buy into

PR1MA projects will not be

protected under the HDA

legislation and the ‘speedy,

cheap and effective’ Housing

Tribunal will not be available for

aggrieved and ‘short changed’

buyers and victims,” Chang

explains.

C] Build Then Sell 10:90

(BTS10:90) concept

This raises the ABANDONED

HOUSING PROJECTS issue

which continues to dampen and

Value of Property Stamp Duty payable

based on current

scale rate

maintained for First

2-Property

Stamp Duty payable based HBA recommendations

For Third Held –

flat rate of 5%

For Fourth Held –

flat rate of 7.5%

For Fifth and

subsequent

property held –

flat rate of 10%

(RM)

300,000

5,000

15,000

22,500

30,000

400,000

7,000

20,000

30,000

40,000

500,000

9,000

25,000

37,500

50,000

750,000

16,500

37,500

56,250

75,000

1,000,000

24,000

50,000

75,000

100,000

Budget

2016

PART2

> HBA’s views and concerns on property in next year’s budget