staff. not stafs.
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Property News
- Thread starter FHBH12
- Start date
staff. not stafs.
Rehda: GST will push up home prices by 2.6%
Tuesday, 21 October 2014
By: ISABELLE LAI
PETALING JAYA: Home prices will rise by about 2.6% once the goods and services tax (GST) comes into play, said the Real Estate and Housing Developers’ Association Malaysia (Rehda).
The chairman of the association’s task force on accounting and taxation, Datuk Ng Seing Liong, said that the calculation was based on its consultations with industry experts and member developers.
Rehda’s 2.6% estimate differs from that of the Customs Department, which expects the GST to have an impact of between 0.5% and 2% on house prices, assuming there’s no change in supply and demand conditions.
Ng said the association was in full support of the GST and concurred with Customs GST director Datuk Subromaniam Tholasy, who had said that land did not incur the 6% GST rate.
However, he said land was by no means the largest cost component in property development.
“As our calculation clearly spells out, the construction cost, which constitutes 46% of the total development, is not only the largest component but also the component which will attract the GST of 6%,” he said in a letter to StarBiz.
He said the GST on this component would inevitably lead to an increase in house prices.
Appending calculations for a housing unit originally priced at RM400,000, Ng said the price post-GST would be around RM410,560.
Under the 46% construction component, costs were broken down into non-service taxable and service taxable segments, representing 44%, or RM176,000, and 2%, or RM8,000, respectively.
Under the non-service taxable segment comes items such as cement/concrete, steel, bricks and sand, while the service taxable segment includes tiles and fittings/sanitary. Under the existing sales and service tax, no tax is imposed on the non-service taxable category, while the service taxable category has a tax of up to 10% imposed on it.
Post-GST, Rehda’s calculations showed that the non-service taxable cost had gone up to RM186,560, while the service taxable cost remained at RM8,000.
It maintained the same cost estimates for other items, including land (15% or RM60,000), infrastructure and pre-development works (10% or RM40,000), professional fees and marketing costs (6% or RM24,000), finance costs (6% or RM24,000) and profit (17% or RM68,000).
Ng said Rehda also disagreed with Subromaniam, who had said that developers could easily absorb cost increases as their margins were around 30%.
He said it was currently impossible for developers to earn up to a 30% profit, as most development costs were on the rise, along with various capital contributions and charges imposed on developers.
“On average, as tabulated in the calculation, developers, most of which are public-listed companies, are only making around 17% at best,” he said.
However, Ng said it was still too early to determine the actual house price increases post-GST, as Rehda was still in discussions with the Government and there appeared to be many more issues to be ironed out.
http://www.thestar.com.my/Business/...-early-to-determine-exact-increase/?style=biz
Tuesday, 21 October 2014
By: ISABELLE LAI
PETALING JAYA: Home prices will rise by about 2.6% once the goods and services tax (GST) comes into play, said the Real Estate and Housing Developers’ Association Malaysia (Rehda).
The chairman of the association’s task force on accounting and taxation, Datuk Ng Seing Liong, said that the calculation was based on its consultations with industry experts and member developers.
Rehda’s 2.6% estimate differs from that of the Customs Department, which expects the GST to have an impact of between 0.5% and 2% on house prices, assuming there’s no change in supply and demand conditions.
Ng said the association was in full support of the GST and concurred with Customs GST director Datuk Subromaniam Tholasy, who had said that land did not incur the 6% GST rate.
However, he said land was by no means the largest cost component in property development.
“As our calculation clearly spells out, the construction cost, which constitutes 46% of the total development, is not only the largest component but also the component which will attract the GST of 6%,” he said in a letter to StarBiz.
He said the GST on this component would inevitably lead to an increase in house prices.
Appending calculations for a housing unit originally priced at RM400,000, Ng said the price post-GST would be around RM410,560.
Under the 46% construction component, costs were broken down into non-service taxable and service taxable segments, representing 44%, or RM176,000, and 2%, or RM8,000, respectively.
Under the non-service taxable segment comes items such as cement/concrete, steel, bricks and sand, while the service taxable segment includes tiles and fittings/sanitary. Under the existing sales and service tax, no tax is imposed on the non-service taxable category, while the service taxable category has a tax of up to 10% imposed on it.
Post-GST, Rehda’s calculations showed that the non-service taxable cost had gone up to RM186,560, while the service taxable cost remained at RM8,000.
It maintained the same cost estimates for other items, including land (15% or RM60,000), infrastructure and pre-development works (10% or RM40,000), professional fees and marketing costs (6% or RM24,000), finance costs (6% or RM24,000) and profit (17% or RM68,000).
Ng said Rehda also disagreed with Subromaniam, who had said that developers could easily absorb cost increases as their margins were around 30%.
He said it was currently impossible for developers to earn up to a 30% profit, as most development costs were on the rise, along with various capital contributions and charges imposed on developers.
“On average, as tabulated in the calculation, developers, most of which are public-listed companies, are only making around 17% at best,” he said.
However, Ng said it was still too early to determine the actual house price increases post-GST, as Rehda was still in discussions with the Government and there appeared to be many more issues to be ironed out.
http://www.thestar.com.my/Business/...-early-to-determine-exact-increase/?style=biz
developer's. not developers
2.6% is not that much. however, i believe sub sales unit will escalate even higher.
Anyone working in SETIA or have link to management? "The Quality of the house & the service to owners will be effected"… This sentence alone to me is slander isn't it?
Why not you check SP Setia staff turnover rate now before accusing others slandering. If you dont believe what i say that is your business. Not mine.
Looks like u have a Fan Malpaso… Or housefly???
since when we have a kepoh ci in this forum?
Don't play play, we have a person here who acted like a berry haih intelligent adult keep showing off his haih intelligent here.
Those who don't agree with his haih intelligent view will be received his haih intelligent reply, thereafter he will be creating a lot of stories for you.
This haih intelligent adult is the one who is not kepo at all.
Don't believe? or don't know who is he? See his reply later then you will know.
Obviously is you! hahaha.
Wow.....didnt expect that you started this personal attack on me. Finally show your true colours. You even condone those who uses vulgarities and insult the admin in this forum. What a disappointment to know you are just like one of them .....
Wow. .saw the comments across different threads and seems that many bros are turning against this guy. Has he done something that irked many of them? I applaud bros like malpaso n FHBH12 who have been giving constructive inputs to make this forum informative and has substance. Let's get back to the forum objectives and contribute constructively instead of the relentless bickering that had really stained this good forum which is supposed to serve and benefit everyone who has interest in iskandar properties. Cheers.
Property Investment Schemes Gone Wrong
In a recent action against a property investment scheme, Monetary Authority of Singapore has placed Brazilian property developer Ecohouse on alert list. An investor who invested $46k in Mar 2013 has not received any payments. In late 2013 there were already various complains from the Singaporean investors and some are considering legal action.
Ecohouse offers investors a 20% fixed rate of return for a 1 year commitment. Basically how it works is that the investors will first buy the house while it is being developed and then make the returns when the unit is resold to a Brazilian buyer at a higher price.
An EcoHouse Project
This is not the first controversial issue with property investment schemes. There have been many other cases, many of them being landbanking schemes, such as Edgeworth Properties which was a land banking scheme. If one bothers to look online, you can already see a ton of cases, so why should this be any different? It is a wonder people keep piling money into such get rich quick schemes.
Property Investment Schemes Are NOT Equivalent to Property Investments
This is where most property investment scheme salesmen try to sell you. These schemes are more similar to structured investments which promise some kind of payout based on certain scenarios. Generally, the investor does not own the property directly, just a contract with the company while the company continues to hold the title deeds. A direct property investment however works on the principle where you own the property directly and engage agents to manage it for you.
Understanding Risk Levels
For returns of 20% in a year, this should be classified as a very high risk investment. Since the investment is so risky, retirees definitely should not be involved as they do not have the ability to earn back the money. In fact, such property investment schemes should be regulated the same way as other high risk hedge funds, structured products which are only available to the accredited investors. To get property exposure, a good alternative is look at Real Estate Investment Trusts (REITs).
Are The Returns Attractive Enough For The Risks?
So for a property investment, you are subject to market risks, but for the investment scheme, not only are you subject to market risks but also risks of the company going under. Also the returns for a direct property investment can be a lot higher than an investment scheme. Of course the investment scheme promises the returns to be hassle free where they manage it all for you, but if you are not willing to put in the time and effort to manage your investments, why dabble with properties?
Be Skeptical With Every Investment Opportunity
At the end of the day, always explore every investment with a skeptical mind. Why does a Brazilian developer need to go all over the world to raise capital to develop properties? If this is a Brazilian government initiative, shouldn’t they appoint a more established developer with the capital to carry out all the investments? If the scheme fails, what legal recourse do you have? (Probably none since they are not based here, Singapore law will be unable to touch them in Brazil) With all these questions in mind, would you still invest?
http://www.drwealth.com/2014/07/21/...ong/?utm_medium=outbrain&utm_source=outbrain1
In a recent action against a property investment scheme, Monetary Authority of Singapore has placed Brazilian property developer Ecohouse on alert list. An investor who invested $46k in Mar 2013 has not received any payments. In late 2013 there were already various complains from the Singaporean investors and some are considering legal action.
Ecohouse offers investors a 20% fixed rate of return for a 1 year commitment. Basically how it works is that the investors will first buy the house while it is being developed and then make the returns when the unit is resold to a Brazilian buyer at a higher price.
An EcoHouse Project
This is not the first controversial issue with property investment schemes. There have been many other cases, many of them being landbanking schemes, such as Edgeworth Properties which was a land banking scheme. If one bothers to look online, you can already see a ton of cases, so why should this be any different? It is a wonder people keep piling money into such get rich quick schemes.
Property Investment Schemes Are NOT Equivalent to Property Investments
This is where most property investment scheme salesmen try to sell you. These schemes are more similar to structured investments which promise some kind of payout based on certain scenarios. Generally, the investor does not own the property directly, just a contract with the company while the company continues to hold the title deeds. A direct property investment however works on the principle where you own the property directly and engage agents to manage it for you.
Understanding Risk Levels
For returns of 20% in a year, this should be classified as a very high risk investment. Since the investment is so risky, retirees definitely should not be involved as they do not have the ability to earn back the money. In fact, such property investment schemes should be regulated the same way as other high risk hedge funds, structured products which are only available to the accredited investors. To get property exposure, a good alternative is look at Real Estate Investment Trusts (REITs).
Are The Returns Attractive Enough For The Risks?
So for a property investment, you are subject to market risks, but for the investment scheme, not only are you subject to market risks but also risks of the company going under. Also the returns for a direct property investment can be a lot higher than an investment scheme. Of course the investment scheme promises the returns to be hassle free where they manage it all for you, but if you are not willing to put in the time and effort to manage your investments, why dabble with properties?
Be Skeptical With Every Investment Opportunity
At the end of the day, always explore every investment with a skeptical mind. Why does a Brazilian developer need to go all over the world to raise capital to develop properties? If this is a Brazilian government initiative, shouldn’t they appoint a more established developer with the capital to carry out all the investments? If the scheme fails, what legal recourse do you have? (Probably none since they are not based here, Singapore law will be unable to touch them in Brazil) With all these questions in mind, would you still invest?
http://www.drwealth.com/2014/07/21/...ong/?utm_medium=outbrain&utm_source=outbrain1
If you look at the thread carefully, you will know that i only respond when some chaps here resort to personal attack and provocation(including vulgarities) against me. Worst, there are hypocrites that condone their act. The problem is when i responded to their thread, they just cry and rant like a baby. I agree with you. Lets focus on the issues and contribute constructively. Focusing on me in this forum will not benefit anyone.
I may not know the exact stories but I do know everything takes 2 hands to clap. I'm just wondering how come so many pple are against you in this forum if you are often right or perhaps taking a tactful stand on various issues? I appreciate bro malpaso and FHBH12 inputs when I purchased my 1st property in iskandar and their insightful feedback about my property of interest really helped me to make a balanced and well informed decision. I don't see people turning against them for whatever reasons so far. Did they do something right which all of us in this forum can learn from? I hope you don't feel that I'm siding with them but just stating my pleasant experience gained from this forum previously. I just personally feel that forum space is precious and should only be filled with constructive points and mutual tactfulness about each other comments and opinions. I know it's easy to say that we can agree to disagree but how often pple are really practising it without any intent of imposing personal stand and points unto others? Just my thoughts and observations. I'm not a property expert and therefore I am here to learn humbly from many others who have been there and done that. Cheers.
No problem for me. I respect your view on this. Cheers.
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