Results 1 to 2 of 2

Thread: Foreign home buyers in Johor face fee hike

  1. #1
    reporter

    User Info Menu

    Default Foreign home buyers in Johor face fee hike

    http://www.straitstimes.com/premium/...-hike-20131009

    Foreign home buyers in Johor face fee hike

    Processing fee of 4% to 5% of sale price could start early next year

    Published on Oct 09, 2013

    By Lester Kong Malaysia Correspondent In Kuala Lumpur


    FOREIGN property buyers in Johor will soon have to pay a higher processing fee of 4 per cent to 5per cent of the sale price, imposed to raise government revenues amid rising property prices.

    Property analysts expect the new ruling to spark a buying rush before January - when it is expected to take effect - but do not see it dampening foreign demand for Johor properties.

    Currently, foreigners pay only a flat fee of RM10,000 (S$3,900), though they are restricted to buying only properties that cost RM500,000 or more.

    The higher fee will come on top of an expected increase in property tax rates for foreign property owners, which the state government announced in June.

    With real estate prices rising in Johor, the time was "right" for the state government to introduce the new fee, State Housing and Local Government executive councillor Abdul Latiff Bandi was cited by The Star as saying yesterday.

    "They now pay a flat rate of RM10,000 for residential, commercial and industrial properties and it is unfair to the state government," he said.

    One hot spot is Iskandar Malaysia, where foreign buyers - most of them Singaporeans - have been snapping up homes.

    The proportion of home sales to foreigners has risen steadily, from 12.1 per cent in 2010 to 15.7per cent last year, said Ms Veena Loh, general manager of government-linked research body Malaysia Property.

    In the long term, property experts do not think the new fee would affect foreign buyer interest, as residential property prices - even those in high-end projects in Johor Baru, Pulai, Plentong and Tebrau - are four to eight times lower than those in Singapore.

    "The new processing fee is still at an affordable level, so it is very unlikely to result in significant reduction of foreign buyers in Johor," Mr Ong Kah Seng, a property analyst at R'ST Research, told The Straits Times.

    Datuk Abdul Latiff said he expects the new fee to be implemented by the end of the year or early next year. The proceeds will be used to fund projects and programmes for local residents.

    "These are just some of the steps that the state government will be introducing to safeguard the interests of locals," he was quoted as saying in the New Straits Times.

    Yesterday's announcement came four months after Johor Menteri Besar Mohamed Khaled Nordin said that higher assessment rates for foreign-owned properties will be imposed this year to boost the state's revenues.

    Mr Abdul Latiff also said foreigners will not be allowed to buy properties in the secondary market from local residents under the new ruling, unless the properties are owned by foreigners.

    Property agents believe that buyers will get used to the higher fee. Said Mr K.P. Loh, general manager of Tophill Realty in Johor Baru: "People will adjust to it, just like a petrol price hike."

    Half of his company's sales come from foreign clients, more than 60 per cent of whom are Singaporeans.

    [email protected]

  2. #2
    reporter

    User Info Menu

    Default Johor mulls property tax on foreign buyers

    http://www.businesstimes.com.sg/prem...uyers-20131009

    Published October 09, 2013

    Johor mulls property tax on foreign buyers

    They may have to pay 4 to 5 per cent of the property price as processing fee

    By pauline ng in Kuala Lumpur


    FOREIGN buyers of Johor property will be required to fork out 4 to 5 per cent of the property price as processing fee under a new policy being considered to boost the state's revenue and maintain home affordability for locals.

    State housing and local government committee chairman Abdul Latiff Bandi said that the new fee, expected to be implemented by year-end or early next year, will apply to all properties, including those purchased on the secondary market, according to local news reports.

    Currently, a flat rate of RM10,000 (S$3,906) is levied on all properties acquired by foreigners.

    Property players said that the 4 to 5 per cent levy referred to by Mr Latiff could be the tax which Menteri Besar Mohamed Khaled Nordin had mentioned in June when he alluded to higher tax rates being levied on foreign property owners, of which there are an estimated 130,000 in Johor.

    R'ST Research director Ong Kah Seng said that the increase in processing fee was "within expectations and still at an affordable level (for most wealthy foreigners)", and hence unlikely to significantly dampen buying interest.

    "Many are still open to purchasing a residential property in Johor for investments and future capital appreciation given Iskandar Malaysia is well on track to deliver its expected returns," he added.

    Tanah Sutera Development general manager Steven Shum said that it was unclear if the proposed fee would be levied at the signing of the sales-and-purchase agreement or when the title is transferred, but observed that it would be fairer to buyers if not applied retrospectively.

    KGV-Lambert Smith Hampton (Johor) director Samuel Tan Wee Cheng said that he preferred to wait until such proposals appear in "black and white" before reacting, given that similar plans have been floated in the past.

    "They are testing the market to see the reaction," remarked Mr Shum.

    Formerly the Johor branch chairman of the Real Estate & Housing Developers' Association, he pointed to another proposal for developers to fork out 7.5 per cent of a house price to the state for "quick release" of units allocated under bumiputra quotas to be sold to other buyers. (Except for exempted areas such as Medini, developers need to allocate 40 per cent of units in a development to bumiputras.)

    He said that builders are against proposals that would lift prices, noting that while few would complain in a buoyant market, that could quickly change in a downturn.

    Speculation has played a big part in home prices rocketing considerably over the past two to three years, in some cases by 100 per cent, he noted.

    The state government is clearly concerned about the rapid acceleration of house prices, however, and is under pressure to keep a lid on it following robust demand brought about by the growth of Iskandar Malaysia.

    Earlier this month, Mr Khaled said that Johor would continue to welcome foreign property buyers, but would ensure that locals are not deprived of home ownership.

    He said that foreigners would no longer be allowed to buy real estate in the secondary market from locals nor accorded the right to purchase agriculture land.

    But the minimum threshold for foreigners acquiring residential properties would be maintained at RM500,000 and not doubled to RM1 million.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •