With the HOC and other packages coming into play, homebuyers have a better choice
By Vigneswar Rajasurian vignes@thestar.com.my
The Covid-19 pandemic has created a new environment that is advantageous to potential homebuyers, but only if they are willing to commit to the purchase. From the reintroduced Home Ownership Campaign (HOC) and the incentives under the National Economic Recovery Plan (Penjana) to the many choices of residential units that developers are eager to offload, there is perhaps no better time to buy a home, especially for first-time homebuyers.
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 preexisting measures to encourage property ownership among Malaysians such as special loans for first-time homebuyers or Rent-toOwn schemes, which are topics for another article.
Collectively, these ingredients should catalyse 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 several months ago.
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 RM2.5mil. The stamp duty exemption on the instrument of transfer is limited to the first RM1mil 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 and 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. 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 1.75% is the lowest since 2010 and as a result, consumers can expect to obtain loans from banks at a lower rate. However, 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.
Virtual Property Fair
With the risk of Covid-19 transmissions still present, it would be prudent to avoid large gatherings and events. Fortunately, shopping for a property is now possible from just about anywhere and homebuyers can experience a virtual tour of show units via a computer or mobile phone without the need for special equipment.
Much like the physical StarProperty Fairs held over the years, the StarProperty Stay-AtNew Home Virtual Fair 2020 will kick-off Sept 18. There are also many great property deals, offered by some of the top developers of the nation. Among them are Matrix Concepts, Symphony Life, Platinum Victory Development, Paramount Property, HCK Group, Tropicana Corporation, Worldwide Holdings and Putra Nilai Development.
Communication is made easy and conducive through the available chat function, or visitors can opt to engage the developers’ representative via Whatsapp, phone or email. Even better, the StarProperty virtual fair is equipped with matchmaking, sorting, and filtering functions, allowing potential homebuyers to narrow down the desired product. In addition, there are many prizes to be won. At the end of the day, the choice to buy a property lies in the hand of the purchaser, but given the many conducive packages available, there may not be a better time to seal the deal.
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