Saturday, 26 October 2013

Malaysia Budget 2014 – Property Cooling Measure

Budget 2014

With 3 main policies detailed in the 2014 Budget set to be put into effect between January 2014 and April 2015, the Malaysia property market is set to deal with an array of changes. This is mainly to curb excessive speculation and help to solve affordability issues besetting the housing market. The budget promotes properties as a long-term investment, and not something to be flipped to make short-term gains.It show efforts from Malaysia government to make sure the property market to continue to stay resilient: with current influx of foreign investment.
Real Property Gain Tax


Real Property Gain Tax 


-No of years calculated base on SPA signing date.
-Rate to pay base on current rate when properties is sold.

Citizen
1st - 3rd years = 30%
4th years = 20%
5th year = 15%
Onwards = No

Property sold within the initial 3 years of acquisition will go through Capital gains tax of 30%. Subsequently, the fourth years will be 20% and fifth years 15%. 0% will follow through the 6 years onwards.
Company
1st - 3rd years = 30%
4th years = 20%
5th year = 15%
Onwards = 5%

Property sold within the initial 3 years of acquisition will go through Capital gains tax of 30%. Subsequently, the fourth years will be 20% and fifth years 15%. 5% will follow through the 6 years onwards.

Non-Citizen
1st - 5th years = 30%
Onwards = 5%

Property (Iskandar New Launch Development) sold within the initial 5 years of acquisition will go through Capital gains tax of 30%. Subsequently, 5% will follow through the 6 years onwards


Minimum Foreigner Investment

Minimum Property Price ceiling raised from RM500K to RM1Million 

Currently, Foreigner able to buy RM500k Properties in Johor Iskandar. With the new measure, only properties above the RM1 Million Threshold can be brought by foreigner.However, this ruling will not affect location like Iskandar Medini


Developer Interest Bearing scheme


No More DIBS Scheme
Property developers are prohibited from implementing projects that have features of Developer Interest Bearing Scheme (DIBS), to prevent developers from incorporating interest rates on loans in house prices during the construction period. Therefore, financial institutions are also prohibited from providing final funding for projects involved in the DIBS scheme.



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