PETALING JAYA: Real estate developer LBS Bina Group has presented several proposals to boost the local housing market in its 2022 budget wishlist.
What he hopes to see is:
a) Ongoing implementation of the Home Ownership Campaign (HOC)
LBS hopes that the government will consider a permanent implementation of the HOC as well as a full exemption from stamp duty up to the first million RM of the purchase price of the property. This will ensure that the entire construction and property development industry supply chain will continue to operate uninterrupted as long as the buying sentiment remains unchanged.
b) Relaxation of requirements for Malaysia My Second Home (MM2H) program
While the group welcomes the relaunch of the MM2H program, recent revisions to the requirements for new applicants may be too strict and deter foreigners from choosing to work and live in Malaysia. LBS hopes the government will consider the suggestions on the newly revised MM2H program criteria:
i) lowering the minimum qualifying income for an applicant to original RM 10,000 per month;
ii) reduce the minimum amount of liquid assets to RM500,000 from RM1.5 million;
(iii) reduce the minimum amount of term deposits in a Malaysian bank account to RM300,000 from RM1 million; and
iv) maintain the duration of the MM2H pass at 10 years.
The group believes these proposals are stringent enough to attract qualified foreign nationals and ensure the continued success of the MM2H program.
c) Incentives for the adoption of the industrialized construction system (IBS)
The group advocates the use of IBS, which has been shown to reduce construction time and costs without compromising the quality of housing.
LBS welcomes government initiatives to encourage the use of IBS by granting investment tax breaks of 60% on eligible capital expenditure incurred within five years, which can be offset up to 70% of the statutory income of the business. The group, however, hopes the government will consider expanding these tax incentives to include existing IBS players, rather than reserving the incentives for new players only.
With this, the group will be able to channel the additional savings to facilitate expansion and increase its research and development to increase its use of IBS technology.
d) Reduction of compliance costs
LBS wants the government to reduce compliance costs borne by developers, for example, by reducing development costs, land conversion premiums or the demand for strata title. Any savings made through these measures will be extremely beneficial and may be passed on to homebuyers at a more affordable price.
e) Incentives to counter rising material costs
LBS hopes the government will consider implementing a tax to reduce costs or introduce strict price controls on building materials. LBS believes this will ensure that developers do not pass the increased cost of materials on to homeowners.
f) Reduction of the minimum threshold for foreign ownership
The current situation of real estate overhang is a concern for developers. To facilitate this, the group is hoping that the current price threshold for foreigners looking to buy property in Malaysia will be reduced to RM500,000 for all states. This allows real estate developers with high unsold inventories to free up cash flow for other real estate developments.
g) Exemption from levy on foreign labor in the construction sector
LBS hopes the government will consider granting a waiver of the foreign labor tax. With this, this will help reduce the cost of construction which in turn will lower the cost of developing properties, thus making homes more affordable.