No vacancy tax next year amid industry concerns

KPKT’s priority is to discuss ways to make housing ownership accessible for the people

by FARA AISYAH / pic by TMR FILE

THE proposed vacancy tax will not be implemented in 2021 as it is not a priority in the current market, said Housing and Local Government (KPKT) Minister Zuraida Kamaruddin.

“The priority of KPKT is to discuss ways to make housing ownership accessible for the people, including getting the bank loans and documentation of second income, among others.

“We want to make sure the bottom 40% and middle 40% groups can conveniently get their loans approved, and banks can relax their lending standards,” she told reporters at the launch of Digital Skim Rumah Pertamaku Cagamas SRP Bhd in Kuala Lumpur yesterday.

She added that the idea of vacancy tax implementation emerged when the government was discussing the overhang homes in the high-end property segment.

Zuraida added that there are only 29,000 completed high-end homes but unsold worth RM29 billion, which are not an urgency for the government to resolve.

“Let the developers solve that issue in the market. We (KPKT) believe the issue of securing home loans is more important to be discussed in the Economic Action Council meeting,” she said.

The National Property Information Centre reported that there are 29,698 overhang units in the residential property segment worth RM18.91 billion in the first half of 2020.

Industry players and experts have raised concerns on the vacancy tax, as it is expected to depress the property market further.

Glomac Bhd group MD and CEO Datuk Seri Fateh Iskandar Mohamed Mansor said the proposed tax is not suitable to be enforced in a challenging economic environment.

“The vacancy tax is going to kill the market. Vacancy tax is introduced in a hot market, while we are in a very subdued market.

“We never had that kind of foreigner influx into our property market. Even during the hot market in 2014 to 2015, it was the locals who were buying our homes,” he told The Malaysian Reserve in an interview.

Fateh Iskandar added that it will take at least one year and a half before the market could recover, let alone reach a hot market status.

A developer who declined to be named said vacancy tax was introduced in cities like Melbourne and Los Angeles because foreigners intentionally left their units there unoccupied, making them seem like an abandoned city; while Malaysian overhang problem is a situation of mismatch between demand and supply.

“If the vacancy tax is implemented, developers will have to either fork up money probably via bank borrowings to pay the tax or sell their inventories at a cheaper price,” the developer, who requested anonymity, said.

Meanwhile, the overhang units of serviced apartments stood at 16,942 units worth RM14.92 billion in January to March 2020.

Johor made the bulk of overhang units in both residential and serviced apartments segment, with 5,468 units and 12,148 units respectively.

The other states with the highest overhang residential units include Perak (4,919 units), Selangor (4,844 units), Pulau Pinang (3,043 units) and Kuala Lumpur (KL) (2,586 units).

KL is the state with the second-highest overhang serviced apartments with 2,333 units, followed by Selangor with 1,847 units.