Commercial & Industrial Property News Update

Malaysia - Mah Sing Wants More Incentives For Property Sector

September 7, 2012

Mah Sing Group Bhd hopes that the upcoming Budget 2013 will have more financial incentives, tax breaks or infrastructure projects to benefit the property sector.

The real estate sector is a key pillar of growth for the Malaysian economy as the sector directly impacts more than 140 industries. As such, home-grown property developer Mah Sing Group Bhd wants the government to focus more on the sector in its Budget 2013.

The Group said that it hopes to see more benefits accorded to real estate in the form of financial incentives and tax breaks. It added that the government could choose to greenlight infrastructure projects that will directly and indirectly help the sector.

In a statement, group managing director Tan Sri Datuk Sri Leong Hoy Kum said,"Property is acknowledged as the best hedge against inflation, and people buy properties as a form of wealth preservation and not speculation."

"We hope that the government would balance its approach in stimulating the property sector which is an important engine of growth for the country."

Budget 2013 will be tabled in Parliament on 28 September by Prime Minister Datuk Seri Najib Tun Razak. Mah Sing said that it hopes the government will not introduce any more policies or requirements that will increase business costs for property developers. It also hopes to see measures aimed at reducing compliance cost, with the ultimate goal of promoting the property market.

The group noted that reducing compliance cost will directly reduce the cost of doing business and the savings passed on to buyers will improve the affordability of the properties.

In order to further boost the property industry, Mah Sing also proposed reducing the stamp duty to 0.5% for the first RM 300,000, 1% for RM 300,000 to RM 1 million and 2% in excess of RM 1 million.

"In addition, for further stimulus, it would be good if tax relief is extended to all interest incurred on end financing for the first home."

"Alternatively, perhaps the government could consider providing grants of up to 10% of the purchase price of affordable properties, to first-time home owners so that it will be easier for them to own their first property," it said.

Mah Sing also hoped that the government will encourage foreign buyers to acquire Malaysian properties through a further easing of policies.

"As foreign purchasers account for only 2% of property transactions in Malaysia, this will not be a big cost to bear, and at the same time, can project a pro-investment image to the world at large," it said.

Other suggestions put forward included a consideration to reduce the personal income tax rate or hike up personal income tax relief to increase disposable income, and to reduce corporate income tax to encourage economic growth.

Tags: Commercial real estate, Income properties

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