Buyers and developers make Budget wishes
01/09/2007 NST Zoe Phoon

It's that time of the year again, when not just house buyers but developers too look forward to seeing their hopes turning into concrete reality.

Will they get what they want in Budget 2008, which is to be tabled in Parliament this coming Friday? Will their burdens of expenditure be reduced, and quality of life improved?

Not unexpected, the wish of the National House Buyers Association (HBA) is for "no more abandoned projects".

HBA honorary secretary general Chang Kim Loong said with the 10:90 variant of the Build-Then-Sell (BTS) method of housing supply supported by the government, things are looking up for buyers.

However, he said the government should go one step further and make BTS mandatory for residential projects, especially in new development areas such as the Iskandar Development Region.

Another HBA wish – and that of individual house buyers as well – is for the government to provide fiscal incentives to the country's financial institutions so that they can waive interest and capital repayment for buyers in residential projects deemed abandoned by the Ministry of Housing and Local Government.

The repayment can resume, Chang said, after the projects have been revived and vacant possession delivered. This would ease the burden of 60,000 affected buyers, including civil servants.

Chang also called for fiscal incentives that can encourage developers to pursue BTS. One would be to exempt them from building low-cost houses if they adopt the 10:90 concept, as this "would make developers think long and hard to make the concept a reality".

House buyers also want the government to include provisions to improve the quality of life in the urban areas in Budget 2008.

By this, they expect the Finance Minister to offer stimuli that will compel private developers to provide more playgrounds, better drainage and roads, and lower densities in their housing estates.

A legal adviser to 42 resident associations in the Klang Valley, Derek Fernandez, said he hopes that residents will be given "full rebates for the purchase of renewable energy resources such as solar panels, as well as for the installation of rainwater harvesters in homes".

Other fiscal plans the government should consider in Budget 2008 to reduce the hardship faced by the people are:

Provide subsidies on the high cost of extending land leases;
Remove stamp duties and taxes for property purchased by first-time buyers; and
Remove subsidies in all privatisation contracts, especially for power, water and toll as this would not just benefit consumers but encourage more competitive markets.
On the part of developers, the Real Estate and Housing Developers Association (Rehda), said its Budget wishes include the reduction of stamp duty on the transfer of property.

The government should also consider offering an outright grant to first time house buyers to lighten their financial burden, said its president Ng Seing Liong.

"This would have a significant effect on house purchase," he explained.

Ng said he would also like to see a further reduction in corporate tax so it falls in line with the rates imposed by neighbouring countries, and for the income tax bracket to be broadened.

On stamp duty reduction, Ng proposed a rate of 0.5 per cent for transactions worth up to RM300,000, as against the current rate of one per cent for the base transaction value of RM100,000.

For property valued between RM300,000 and RM1 million, the rate should be pegged at one per cent, and for those worth more than RM1 million, it should be two per cent.