Penang has come up with several new housing rules aimed at cooling down the property bubble.
1. Low-cost and low-medium-cost homes (up tp RM75000) cannot be sold within 10 years unless permission is obtained. Even so, it can only be sold to qualified buyers registered with the Housing Department.
2. Similarly, affordable houses (up to RM400000 on the island and RM250000 on the mainland) cannot be sold within five years, unless permission is obtained.
3. Foreigners can only buy property above RM1m (or landed property over RM2m). A 3 per cent levy on the transacted price will be imposed from 1 February 2014.
4. A 2 per cent levy will be imposed on sales of property (apart from affordable housing) if sold within three years of purchase for S&Ps signed from 1 February 2014.
What do you think? Will this be enough to deflate the property bubble?
My hunch is that a lot of the speculation is taking place in the RM0.5m to RM1.0m category and many of these homes are targeted by locals rather than foreigners.
The full statement from the state government:
New Housing Rules From 1 February 2014 To Protect Penang From Being Adversely Affected By A Property Bubble As Well As Ensuring That Public Housing And Affordable Housing Are Bought By Genuine Purchasers Who Are Qualified First Time Buyers From Lower and Middle-Income Groups.
The new housing rules announced in the 2014 Penang state Budget at the Penang State Assembly and proposed to be effective from 1 February 2014 are designed to protect Penang from being adversely affected by a property bubble as well as ensuring that public housing and affordable housing are bought by genuine purchasers who are qualified first time buyers from lower and middle-income groups.
As a responsible government seeking sustainable economic growth and development, the Penang state government is careful to avoid the pitfalls of any property bubble that will bring hardship to the rakyat and damage the economy. Japan is a good lesson of the dangers of a property bubble.
The state government has set up a RM500 million Public And Affordable Housing Fund to build 20,000 units of public housing and affordable housing in all 5 districts of Penang. This is the largest amount set aside by any state government in Malaysian history to build affordable and public housing.
As a people-centric government, the Penang state government wants to achieve housing democracy that allows every working family to own their own home. Ensuring that public housing (low cost and low medium cost houses) is owned by the poor and genuine first time buyers is our priority.
The Penang state EXCO had during its last meeting refined the new housing rules for clarity and certainty as follows:
1, Public Housing – Low Cost And Low Medium Cost Housing
All low cost homes (up to RM42,000) and low-medium cost homes (up to RM72,500) purchased can not be sold for 10 years. Those who wish to sell during the first 10 years must appeal to the state government and can only be sold to “listed buyers”. Listed buyers are those who have registered with the Housing Department of the state government and are certified as low income groups that are qualified to purchase low-cost or low-medium cost housing. This 10 year rule will cover all past and future purchases. The balloting of houses will be subject to oversight by an auditing firm.
2. Affordable Housing
Affordable housing is classified as houses which were initially purchased below RM400,000 on the island and RM 250,000 on the mainland. Affordable housing purchased can not be sold for 5 years. Those who wish to sell during the first 5 years must appeal to the state government and can only be sold to “listed buyers”. Listed buyers are those who have registered with the Housing Department of the state government and are certified as middle-income groups that are qualified to purchase affordable housing. This 5 year rule will cover all past and future purchases. The balloting of houses will be subject to oversight by an auditing firm.
3. Purchases By Non-Citizens
Non-residents can only purchase properties in Penang in excess of RM1 million and for landed property on the island must exceed RM2 million. All purchases of properties by non-residents will be subject to a 3% levy on the transacted price from 1 February 2014. Exemptions are provided for purchases for industry purposes or for a purpose that promotes employment, education, human talent or promoting Penang as an international and intelligent city.
4. 2% Levy On Property Purchased After 1.2.2014 Sold Within 3 Years
A 2% levy will be imposed on the seller for all property sold within 3 years from the date of the Sales & Purchase Agreement(SPA) signed from 1 February 2014. In other words, this is not retrospective. Properties bought with the SPA signed before 1 February 2014 will not be subject to this levy. Only properties bought with the SPA from 1 February 2014 will be subject to the 2% levy if sold within 3 years. This 2% levy is not applicable to affordable housing.
Preliminary discussions were held between some property players and housebuyers but the state government is prepared for further discussions with all stakeholders
LIM GUAN ENG