The government recently introduced several incentives under the National Economic Recovery Plan (Penjana) and the revived Home Ownership Campaign (HOC2) to spur the local property market. The measures coupled with dipping prices in the property market and low lending rates come together to present a goldmine of opportunity in real estate.
The incentives also supplement pre-existing measures to encourage property ownership among Malaysians such as special loans for first-time homebuyers or Rent-to-Own schemes, which are topics for another article. Collectively, these ingredients should serve as a catalyst for Malaysians to purchase a property, be it for own stay or investment purposes.
Here are five reasons to buy a property now:
Return of the HOC
Calls to bring back the popular HOC that ended on Dec 31, 2019 were answered when Prime Minister Tan Sri Muhyiddin Yassin announced its reintroduction during a speech delivered earlier this month.
Under HOC 2020, stamp duty exemptions apply on the instruments of transfer and loan agreement for the purchase of residential homes priced between RM300,000 and RM2.5 million.
The stamp duty exemption on the instrument of transfer is limited to the first RM1 million of the home purchase price.
Full stamp duty exemption is given on mortgage agreements and sales and purchase agreements (SPA) signed between June 1, 2020 until May 31, 2021 and are further subject to at least a 10% discount provided by the developer.
RPGT exemption
The Real Property Gains Tax (RPGT) is a capital gains tax that is charged on the profit derived from the sale of real property or shares in real estate companies (RPC).
The amount charged depends on the status of the seller (whether a citizen, permanent resident or company) and the duration of ownership of the property.
As part of Penjana incentives, Muhyiddin announced that Malaysian citizens seeking to sell off residential homes would be exempted from the RPGT from June 1, 2020 until Dec 31, 2021.
The RPGT tax exemptions and HOC incentives may offset any dip in property value sellers face making it an ideal time for Malaysians to upgrade or downsize to newer homes.
Loan restrictions on 3rd property removed
Previously, buyers who wished to purchase a third property valued at RM600,000 and above had to contend with a maximum 70% margin of financing limit on the housing loan.
Such restrictions have now been removed for the duration of the HOC program. However, loans are still subject to internal risk management practices of the respective financial institutions.
Low-interest rates
Changes in interest rates do not fall under Penjana but rather from Bank Negara Malaysia (BNM), which further reduced the Overnight Policy Rate (OPR) last month.
The revised OPR of 2% is the lowest since 2010 and as a result, consumers can expect to obtain loans from banks at a lower rate.
However, do bear in mind the OPR rate is just a guide and interest rates vary across banks. Other factors like an individual’s credit health also come into play.
Online Property Fair
To visit the digital fair, click here: https://fair.starproperty.my/digital-fair/
With the risk of Covid-19 transmissions still present, it would be prudent to avoid large gatherings and events.
Fortunately, you can now shop for your next property from the comfort of your home and experience a virtual tour of show units via your computer or mobile phones without the need for special equipment.
Much like the physical StarProperty Fairs held over the years, the Stay-At-New-Home Digital Fair features irresistible discounts and promotions by trusted property developers.
At the time of writing, the digital fair features 24 projects from 22 property developers and the numbers are set to increase.
Homebuyers who purchase a property from the digital fair are also entitled to participate in the ‘Buy & Win’ contest and stand to win holidays to Greece, Japan or Korea as well as home appliances.
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