pic by RAZAK GHAZALI
THE Housing and Local Government Ministry (KPKT) has not made any final decision on a proposal to implement a vacancy tax to address the number of unsold luxury residential units in the country.
Its Minister Zuraida Kamaruddin (picture) said the government is still at the discussion stage and is looking at alternative options including to increase monitoring of new constructions to resolve the matter.
“At this stage, the proposal is to impose the tax on high-end properties worth over RM500,000 and not on affordable homes. So, our current stand is to find other ways to enable closer monitoring of new constructions by developers. We want to make sure that the supply meets demand.
“We are thinking of setting up a rule to ensure that developers submit their feasibility studies to KPKT to allow more oversight on the government’s part,” she told the Dewan Rakyat in response to Tanjong Malim MP Chang Lih Kang who inquired on the matter.
Previously, Zuraida said her ministry was formulating a tax which could be imposed on developers who fail to sell their properties to reduce the overhang of residential properties.
She said the introduction of the tax could induce developers to be more sensible and responsible in the projection of their projects, particularly high-rise developments.
The minister also said the introduction of the vacancy tax does not require Parliament’s approval as no amendment to the existing Act is needed.
She said once the tax is approved by the Cabinet, KPKT will look at implementing the tax as early as next year.
The most recent data by the National Property Information Centre showed that there were 3,876 unsold residential units priced above RM1 million worth a total RM7.9 billion nationwide, as of the first quarter of 2020 (1Q20).
In 2Q18, there were 2,260 unsold condominium units within the Klang Valley, of which 498 comprised luxury units worth RM1 million and above.
The matter was first raised by Deputy Federal Territories Minister Datuk Seri Edmund Santhara Kumar who told the Parliament on Aug 13 that Putrajaya will study a suggestion to introduce a vacancy tax to be imposed on properties that are unoccupied or unsold for a specified time.
This is like the model practised in developed countries such as Canada and Australia.
However, the proposal has since been criticised by market analysts who view that the government must allow the property market to automatically correct itself instead of direct interference via such tax.