New developments to share

[kawan2sgmy]

http://www.thestar.com.my/Business/...GT-removal-of-DIBS-will-curb-speculation.aspx

The new RPGT, effective Jan 1, 2014, targets individuals and companies. It is a more stringent regime and has more bite than the previous regime.

Does anyone know when does the RPGT take effect? Jan 1st or immediate?

 

[snowbird]

The 1m restriction for foreigners will surely benefits the SPRs.
Now, they will have lesser competitors and wider choice in the mid market properties and prices may even slide lower from those who need to off load asap like flippers and developers.

 

[shctaw]

I still checking ....

Does it mean that properties bought prior to 1 Jan 2014 will stick to the old tax bracket?

Won't this build up a rush to sign S&P before 1 Jan 2014?

http://www.thestar.com.my/Business/...GT-removal-of-DIBS-will-curb-speculation.aspx

The new RPGT, effective Jan 1, 2014, targets individuals and companies. It is a more stringent regime and has more bite than the previous regime.

 

[malpaso]

I still checking ....

Does it mean that properties bought prior to 1 Jan 2014 will stick to the old tax bracket?

Won't this build up a rush to sign S&P before 1 Jan 2014?

there are lot of things to check. mainly because each 'news' article i read seem different in the details to others.
for eg i posted a link - sugar to naik today. but i read in other article, it's removal of subsidy from jan 2014 only.
ditto for the RPGT.
most articles just said 30% for yr 1-3 then lower, only one article somewhere states 30% flat for foreigner over 5 year.

 

[potter]

Back in the good old day at "skyscraper city.com"

I always mentioned "kopi index". It refer to price of a cup of coffee will move together with the price of property in that country.

http://www.thestar.com.my/News/Nation/2013/10/25/Budget-2014-reax-GST-sugar.aspx

Malaysia Govt is removing the sugar subsidy; "kopi index" in Malaysia will sky rocket.

The raise in GST will make cost of construction to shoot up; it will force the construction companies and property developers to adjust their price up.

http://www.thestar.com.my/Business/...en-in-the-nearterm-with-anticipated-hike.aspx

RPGT will affect flippers, whom are toxic to property market.

Like I always say; Govt cannot stop a bull run. They can only crash it.
All the measures do not look like it will crash the property market; so let's party.

they give a boost to our elevator.. eat lollipop;enjoy the scenery.

 

[avelc]

RPGT applies when you sell property, so as long as you sell from 1 Jan 2014, the new RPGT applies. The 1mil threshold applies from 1 Jan 2014 too.

If I agree to sell my property before 1 Jan 2014 for 900k to a foreigner, the SPA is signed before 1 Jan, but state consent approval is approved after 1 Jan:
- does it mean the transaction is still allowed? Or I can only sell above 1mil to foreigner since the state consent will delay the actual approval of the transaction.

- old or new RPGT rules will apply? My guess is new RPGT rule.

If the cutoff of 1 Jan only applies to SPA (and not state consent), there will be a frantic rush to buy sub 1mil property by foreigners.

I still checking ....

Does it mean that properties bought prior to 1 Jan 2014 will stick to the old tax bracket?

Won't this build up a rush to sign S&P before 1 Jan 2014?

 

[Ripsta09]

With this news, do you guys think that the rental market will have a major impact? As in for a long term view, price may drop especially those purchased condo in BI like sky exec suites, sky view or horizon residences? I mean surely cant sell above 1M? Those with not so deep pockets how long can tahan till reach 1M? By then new projects with 1M coming up and mostly like new projects and locals prefer landed. Those purchased 3 bedder and above at least have a chance, im worried for those studios and those 1 or 2 bedder purchased above 500k but less than 600k/700k. How long can the value reached 1M with the high interest rates of MY banks.....

 

[cybermad]

Lots of non-medini condo are way < RM 1m range. Many locals/foreigners buy, in hope of reselling to foreigners. I agree the higher-end ones will be more resilient, but there are so many lower-end condo projects currently.

And as we all know, given a choice, the locals will prefer to stay in landed.

Am talking abt high end condos la

 

[Chocolate]

I still checking ....

Does it mean that properties bought prior to 1 Jan 2014 will stick to the old tax bracket?

Won't this build up a rush to sign S&P before 1 Jan 2014?

I hear from one developer that the new taxes applies as long as we're holding the property after Jan
1st no matter although we may have bought earlier. But if they're using the S& P date to caculate years, then for new properties, 3 years are taken up with construction, so its not so punitive for Malaysians. Moreover they are only taxing the REAL GAINS. So I foresee Malaysians can still flip provided there are buyers and it goes up enough. In SG it seems the more cooling measures there are,the higher the prices. Some Singaporeans who can afford to pay abv 1M and just want a retirement home may bite the bullet and go for it. But likely foreign investors will exit the market.
Condos, unless in special zone and exempted may suffer. It may fuel demand for rental condos in Bukit Indah though. 2 of my Singaporean friends have now changed plans and decided to just rent a condo in BI and live off their HDB rental , given up plans to buy. BI condos by SP Setia Sky series are very convenient for retirees.Those in less desirable locations will suffer though and drag down market.

 

[Chocolate]

With this news, do you guys think that the rental market will have a major impact? As in for a long term view, price may drop especially those purchased condo in BI like sky exec suites, sky view or horizon residences? I mean surely cant sell above 1M? Those with not so deep pockets how long can tahan till reach 1M? By then new projects with 1M coming up and mostly like new projects and locals prefer landed. Those purchased 3 bedder and above at least have a chance, im worried for those studios and those 1 or 2 bedder purchased above 500k but less than 600k/700k. How long can the value reached 1M with the high interest rates of MY banks.....

When the current 500+ K condos reach 1M, if that ever happens, the govt likely will revise the minimum purchase price to 1.5M. I think its inevitable that prices will come down but rental may still do well with more people renting instead of buying.Just gotta wait and see.....SP Setia staff tell me most of their units are sold to SPR and Malaysians anyway so it doesnt make a difference but lets see how much they launch Sky Trees for. My guess is they will just reconfigure to increase size so its abv 1M. 391K SGD is still much cheaper than buying a condo in SG.

 

[rotikok]

I think if they spread all over the place , some will fail . You think tourist from oversea will fly in just to visit the theme park ? A family tour to Korea , also not just for Lotte World , we go there for other attraction , shopping , food .. and more . Sometime things cannot compare to other country one . Just like some people keep comparing JB condos to SG condos .

U r right! Comparing the right thing. Seoul is an established city, just visiting its themepark is stupid. however iskandar....besides its still not so wonderful themepark, icant think of other w onderful thing offer to tourists. So u r comparing the wrong thing, liken seoul to sg is much closer. Liken gold coast to iskandar is better comparison. Also Spread out to two cluster as i suggested is not spread out all over the place.

 

[Ripsta09]

When the current 500+ K condos reach 1M, if that ever happens, the govt likely will revise the minimum purchase price to 1.5M. I think its inevitable that prices will come down but rental may still do well with more people renting instead of buying.Just gotta wait and see.....SP Setia staff tell me most of their units are sold to SPR and Malaysians anyway so it doesnt make a difference but lets see how much they launch Sky Trees for. My guess is they will just reconfigure to increase size so its abv 1M. 391K SGD is still much cheaper than buying a condo in SG.

Thanks again Chocolate for your analysis and reply. Appreciate it.

I was asking abt the rental market sentiments as we are likely gonna rent a place when everything is approved and pending for reno. A fren rent a plc at the Lagenda Tasek and for a 3 bedder they are paying less than 2K and at BI Sky Suites it is at 3K+ and some at 4K+. Understand it is at a different location but if one wants to travel back to SG, surely via wdls is cheaper but even to 2nd link it is not that far off if one works at the west of SG. Could it be due to BI currently only has 1 condo being marketed?

 

[kawan2sgmy]

I think at this moment, everything is still not very clear, maybe even lawyers will need clarifications from relevant authorities before they can advise clients.

I now worry I may need to sell my condo to the locals becos I guess my unit might not reach the 1 million mark in the near future. Therefore buyer pool becomes smaller.
There again, the locals might prefer to buy direct from developer. Probably got to keep for own use liow.

I still checking ....

Does it mean that properties bought prior to 1 Jan 2014 will stick to the old tax bracket?

Won't this build up a rush to sign S&P before 1 Jan 2014?

 

[Stevewish]

I think at this moment, everything is still not very clear, maybe even lawyers will need clarifications from relevant authorities before they can advise clients.

I now worry I may need to sell my condo to the locals becos I guess my unit might not reach the 1 million mark in the near future. Therefore buyer pool becomes smaller.
There again, the locals might prefer to buy direct from developer. Probably got to keep for own use liow.

To add "the locals might prefer to buy direct from developer" and landed rather than condo.

 

[Chocolate]

Thanks again Chocolate for your analysis and reply. Appreciate it.

I was asking abt the rental market sentiments as we are likely gonna rent a place when everything is approved and pending for reno. A fren rent a plc at the Lagenda Tasek and for a 3 bedder they are paying less than 2K and at BI Sky Suites it is at 3K+ and some at 4K+. Understand it is at a different location but if one wants to travel back to SG, surely via wdls is cheaper but even to 2nd link it is not that far off if one works at the west of SG. Could it be due to BI currently only has 1 condo being marketed?

You're very welcome and I agree with you . Once the other "Skies" are ready, it will be open skies and I think tenants will have more bargaining power.At the moment Sky Suites rental is pretty steep as it has a monopoly and people are prepared to pay for the location.Everything is pretty much walking distance. If you don't mind travelling a bit though, there is a lots of cheaper rental available like 10 mins drive away, including Danga View.That's nearer to Woodlands also.

 

[Sunday]

yes, i think the nearest will be the Horizon Residence by MB, which will TOP / CCC in end 2013, which will give the current "Sky"a run for their rental. Let us see.

I heard from my friend that even the current "sky" is half full after TOP / CCC since early of this year, could any 1 confirm this?

 

[FHBH12]

MALAYSIA BUDGET
Najib tackles fiscal deficit, unveils 6% GST
Removal of sugar subsidies, property cooling measures are also announced
BY S JAYASANKARAN [email protected]
PUBLISHED OCTOBER 26, 2013

Kuala Lumpur

MALAYSIAN Prime Minister Najib Razak yesterday unveiled a 2014 Budget designed to tame the country's fiscal deficit, shrinking current account surplus and growing debt.

The government's expenditure-and-revenue plan will abolish sugar subsidies from today, cool the property market and - controversially - introduce a 6 per cent Goods and Services Tax (GST) by April 2015.

The mention of the GST brought jeers from the opposition, which gave Mr Najib the opening to announce the tax cushions to be implemented. Essential food items such as rice and flour would be exempted from this tax, along with public transport, government services, utilities and property purchases.

In addition, changes will be made to the tax system: Income taxes will be lowered by between 1 and 3 per cent, with the maximum tax rate levied on those with incomes exceeding RM400,000 (S$157,000) a year, up from the current RM100,000.

On the other end of the scale, families earning RM4,000 or less will be off the tax roll.

Corporate taxes will be cut by one percentage point to 24 per cent from 2016.

All told, he proposed a relatively flat Budget: Total spending will rise 0.8 per cent to RM264.2 billion, against revenues of RM224 billion.

The country's Budget deficit will come down to 3.5 per cent of gross domestic product (GDP) next year, from an estimated 4 per cent this year.

The Budget projects GDP growth of between 4.5 and 5 per cent this year, and between 5 and 5.5 per cent for next year. Growth will be driven by private investment (12.7 per cent).

Inflation is projected to remain benign, and there would be full employment at 3.1 per cent.

The Budget revealed that foreign direct investment rose 14 per cent to US$18.2 billion in the first half of this year, while Malaysia's international reserves remained at a strong US$140 billion.

The country's per capita income is expected to reach RM34,126 in 2014; Mr Najib added that the administration has forecast that gross national income of RM46,000 would be reached earlier than the targeted 2020, eliciting cheers from government backbenchers.

Budget 2014 is likely to rally the markets and reassure the international rating agencies. In July, Fitch had kept Malaysia's investment-grade rating but cut its outlook from "stable" to "negative", citing fears about the government's distressed financial position.

Fitch could well restore the country's financial outlook, said Yeah Kim Leng, an economist with the Rating Agency of Malaysia. "The government is bringing down the fiscal gap, and growth remains strong at around 5 per cent. There are no reasonable grounds for Fitch to downgrade (the country's outlook)."

Even so, total federal government debt is expected to rise to RM541.3 billion - 54.8 per cent of the GDP this year and just a shade under the 55 per cent debt ceiling permitted by law.

The only silver lining in that is that more than 96 per cent of the debt is from domestic sources.

Mr Najib also announced that financial assistance to poor households would continue; RM4 billion has been allocated for this purpose. Civil servants will get a half-month bonus, and pensioners, a one-off RM250 payment.

Although the subsidy on sugar will be removed, the government will set aside RM47 billion - a fifth of the total budget allocation - to fund subsidies in 2014. Mr Najib did not say so directly, but implied that more fuel price hikes can be expected, coming after last month's 10 per cent hike.

And in response to the people's complaints about the rising unaffordability of housing - prices in Kuala Lumpur have gone up almost 30 per cent - he unveiled measures to cool the property market. Real property gains tax will be raised, among other changes.

The Budget also listed 13 proposals to help small- and medium-scale enterprises (SMEs), allocating them RM2.6 billion in funding. SMEs are projected to contribute 41 per cent to Malaysia's GDP by 2020.

In a seeming nod to the Indian community which had stood by the ruling coalition in this year's general election, Mr Najib allocated to it RM100 million for education.

A further RM50 million was set aside for the development of entrepreneurs.

http://www.businesstimes.com.sg/pre...tackles-fiscal-deficit-unveils-6-gst-20131026

 

[FHBH12]

I look at the Budget several times and come to the following conclusions:

It is actually quite scary for the middle-lower income groups. Likely fuel subsidy is going to be cut again next year. The property cooling measures will have the opposite effect of pushing up property prices, although they are effective against speculation and property bubble. The people might have a tough time coping with 5% annual inflation on the ground for the next few years. For properties, they could hit 10% annual inflation (driven by government rather than developers and speculators). Locals who can afford properties now are very likely to go out to grab one at a good location to hedge against the inflation.

I welcome any alternative views.

 

[FHBH12]

In the singapore context, companies can claim back the GST they paid, so their costs actually stay the same. GST has no effect on the ppties prices since residential ppties are exempt from GST ?

I think the GST impact (revenue) is big, if not the government will not be implementing it as the main tool to cut its deficit. You can't stop profiteering by middlemen who claim their costs are now higher. They will take the chance to up prices by 10% at least. 2014 and 2015 will be very interesting to watch.

 

[FHBH12]

MALAYSIA BUDGET
Property to be costlier for foreigners
BY PAULINE NG [email protected]
PUBLISHED OCTOBER 26, 2013

Kuala Lumpur

COSTLIER homes are on the cards for foreigners under Malaysia's Budget 2014, with stiffer taxes and a doubling of the minimum price of properties to RM1 million (S$391,000).

Among some of the more severe measures expected to hit the sector are a 30 per cent real property gains tax (RPGT) that will be levied on gains on property disposed within five years, and at 5 per cent in the sixth and subsequent years for non-citizens.

The market had been bracing itself for measures to curb spiralling home prices. Taking aim at speculators, Prime Minister and Finance Minister Najib Razak prohibits developers from implementing projects that have features of Developer Interest Bearing Scheme, to prevent developers from incorporating interest rates on loans in house prices during the construction period. He also wants developers to increase the transparency of home prices by displaying sales price details, including all benefits and incentives offered, such as exemption of legal fees, stamp duty, sales agreements, cash rebates and free gifts.

On a positive note, Mr Najib left stamp duties untouched and exempted the sale, purchase and rental of residential properties from the Goods and Services Tax (GST).

However, because GST will be levied on non-residential properties, it would result in double taxation as stamp duties of 1-3 per cent still apply, according to KGV-Lambert Smith Hampton (Johor) executive director Samuel Tan. "Since the price is higher, the rental and cost will also be higher. The cost of doing business will be affected," he said.

He views lifting the minimum price from RM500,000 to RM1 million negatively, believing that it would ultimately hit local buyers since developers are likely to price their products upwards.

"I think Iskandar has gone to a stage where people will still come in, but it could take a while for them to digest this," he said. "And the RPGT (for foreigners) should have been two-tier: higher for landed than high-rise."

Developers in Iskandar Malaysia's Medini zone may have an advantage in that they are exempt from price caps and bumiputra quotas.

CH Williams Talhar & Wong managing director Foo Jee Gen expects speculators to be hit by the drastic increase in RPGT, but noted that its impact would also be felt by genuine buyers and developers, including foreign ones such as China's Country Garden Holdings, which has a RM18 billion project in Danga Bay.

He said: "I think it's counter-productive since we have been encouraging cross-border investments. We are now moving the goal posts and everyone will be hit by the tax review."

Acknowledging that he was surprised by the overall size of the RPGT increase, Mr Foo expects property companies to be affected, even though the market is expected to benefit in the longer term.

Malaysians will also have to pay higher RPGT. For gains on disposal up to the third year, the tax has been doubled to 30 per cent, reducing to 20 per cent in the fourth year and 15 per cent in the fifth. In the sixth and subsequent years, no tax applies to citizens, but companies will be taxed 5 per cent.

http://www.businesstimes.com.sg/premium/top-stories/property-be-costlier-foreigners-20131026