The Road to Recovery is Paved with Good Intentions

The Malaysian government has lined up several initiatives to help the property market recover from the global pandemic, under the National Economic Recovery Plan (PENJANA). According to the Ministry of Housing and Local Government, the initiatives included home ownership campaign (HOC) 2020.

HOC 2020

The HOC accords housing developers to allow house buyers stamp duty exemption and incentive in the form of at least 10 percent discount on the sale price.

For Malaysians, the HOC programme spells exemption of real property gains tax (RGPT), which is tax levied upon profit from sale of property. The Government expects these initiatives to stimulate the national housing market. This new exemption is limited to three houses per individual from 1 June to 31 Dec 2020.

On home loans, the PENJANA initiative allows third and subsequent home loans to be more than 70 per cent for home loans worth RM600,000 and above. However, this relaxing of the 70 per cent of financing is subject to financial institutions’ approval.

Guildelines Not Specified

All these are good news in theory. For example, in the case of HOC, as of 8 July 2020, no specific guidelines have been finalised for housing developers to submit their application for the campaign. Details are still being ironed out between REHDA (Real Estate and Housing Developers’ Association Malaysia) and the Ministry of Housing.

However, housing developers have been advertising HOC goodies for their projects even before approval has been obtained, probably knowing full well that the approval process may only bear fruit very close to the end of the year?

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