Vacancy tax on unsold luxury condos to be studied

pic by BLOOMBERG

THE federal government will study a proposal to impose a vacancy tax on developers to address the number of unsold luxury condominium units in the Klang Valley, said Deputy Federal Territories Minister Datuk Seri Edmund Santhara Kumar (picture).

Datuk Seri Edmund Santhara Kumar

“From the ministry’s standpoint, we have yet to impose such a tax given the number of unsold units is less than 4%. However, such a proposal will be studied further,” he told the Dewan Rakyat yesterday.

Edmund was responding to Datuk Hasanuddin Mohd Yunus (Pakatan Harapan (PH)-Hulu Langat) who asked if the government would consider imposing the tax as practised in other major cities globally such as Vancouver in Canada and Melbourne, Australia.

A vacancy tax is imposed on properties that are unoccupied or unsold for a specified time.

Data by the National Property Information Centre showed there were 2,260 unsold condominium units within the Klang Valley, of which 498 comprised luxury units worth RM1 million and above, as of the second quarter of 2018 (2Q18), Edmund said.

The Segamat MP did not state whether the government would impose a moratorium on the construction of premium high-rise residential properties but said his ministry, via the Kuala Lumpur City Hall, will ensure the issue of unsold properties be addressed in the KL Structure Plan 2040.

Meanwhile, he said the previous government’s proposal to reduce the threshold for property purchases by foreign buyers announced in Budget 2020 last year has yet to be implemented.

He was responding to a supplementary question by Che Alias Hamid (PAS-Kemaman) who asked if the current government would review the measure.

Former Finance Minister Lim Guan Eng, when tabling the proposed budget for 2020 last year, announced that the government would lower the threshold for foreigners to buy property from RM1 million to RM600,000, as an incentive to clear unsold luxury properties in Malaysia.

The country continues to face a critical glut of unsold high-rise condominiums and service residents.

Figures showed condominiums and apartments worth about RM8.3 billion remained unsold at the end of 2Q19.

Housing and Local Government Minister Zuraida Kamaruddin had then downplayed concerns on increasing foreign ownership as she said foreigners owned only 0.4% or 368 homes priced above RM1 million, while 99% of the properties were purchased by locals, recent data showed.

The Johor state government in November last year made a similar announcement of reducing the threshold for foreigners to purchase a property from RM1 million to RM600,000 as a way to clear some 51,000 unsold properties in the southern state.

This was announced by Johor MB Datuk Dr Sahruddin Jamal when tabling the state budget for 2020. The lower threshold will only apply between Jan 1 and Sept 30, 2020, after which the threshold reverts to RM1 million.