Govt urges to provide income tax relief for home loans in Budget 2022


PROPERTYGURU Malaysia has urged the government to consider providing income tax relief on interest accrued by home loans after the moratorium ends, as this would help ease the household burden of those in need under the Budget 2022.

Its country manager Sheldon Fernandez (picture) said the move is necessary to alleviate the burden of those who have to sell their homes in this difficult time.

“Aside from supporting first-time homebuyers under the Budget 2022, there is also a need to assist those who are struggling to keep their homes during the pandemic.

“We applaud the government’s initiative of providing rent waivers for affected groups and extending the moratorium on rental payments for the People’s Housing Project as part of the ‘Malaysian Family’ welfare agenda on housing, but more can be done for those who are in the ‘sandwich’ group between B40 and M40,” he noted in a statement yesterday.

Fernandez also hoped that the government either extends the exemption of Real Property Gains Tax (RPGT) on residential homes next year or revises it downwards while Malaysians and the property market are still in the process of recovery.

He added that the extension would help alleviate the struggles of homeowners, otherwise the RPGT may be an additional burden on households who have been forced to sell their home as a means to survive.

He said this can stimulate the property market by encouraging buying and selling of residential homes.

Meanwhile, Fernandez pointed out that the government could introduce rental incentives that can be beneficial to both tenants and landlords.

For example, he said the New South Wales government in Australia introduced financial incentives that can be claimed by landlords who provide a rent reduction to tenants impacted by Covid-19.

“A similar measure can be implemented in Malaysia to help support tenants who are experiencing loss of income due to the pandemic and are unable to pay their rent temporarily.

“This incentive can also help tide landlords over financially, so they do not need to resort to selling their property or evicting their tenants, potentially leaving their tenants homeless,” he added.

Additionally, Fernandez hoped that the government will not only extend the Home Ownership Campaign (HOC) to next year, but also extend the incentives offered under the campaign to the secondary residential market.

Based on recent analysis from its data analytics and solutions arm, PropertyGuru DataSense, the secondary residential property market has been growing steadily over the past few years.

He said despite the pandemic’s impact on the overall number of property transactions, it has nevertheless accelerated the popularity of sub-sale transactions throughout 2020 and now in 2021.

“Hence, if the HOC is extended to the secondary market, it will provide a big boost to the housing market and encourage more first-time homebuyers to consider sub-sale properties, especially as the stamp duty exemption can help reduce the upfront cost related to home purchases,” he added.

Overall, Fernandez said the Budget 2022 should be aimed at making homeownership viable to the B40 and M40 groups, as Malaysia continues its journey to recovery.

He noted that according to PropertyGuru’s Consumer Sentiment Study for the second half of 2021 (2H21), while more than four in five Malaysians intend to buy a property in Malaysia in the future, the high property prices are a major deterrent for home seekers.

To promote sustainable urban living, Fernandez said the government should provide additional tax reduction to green-certified buildings, so developers can benefit from income tax deductions equivalent to the additional capital expenditure needed to obtain the green certification.

“More incentives are required to spur green development in the country and encourage developers to adopt accredited green certification tools, such as the Green Building Index and the Malaysian Carbon Reduction and Environmental Sustainability Tool during the construction and operation phases of development projects.

“As the cost of constructing green buildings is typically higher than traditional buildings, even if the differences are covered in the long run, this might deter potential homebuyers from making the purchase,” he added.