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New taxes a worry or lacking of focus and direction?

Posted in Property, KL / Selangor

There are definitely rumours that there will be new taxes in the upcoming Budget 2019 speech by our Finance Minister Lim Guan Eng. This was what he said on 9th Oct reported in TheStar. “Finance minister Lim Guan Eng today said new tax measures will be announced during the tabling of the upcoming Budget 2019 on Nov 2.” Within the same article, he also shared this, “Over the long term, our focus is to ensure we have sufficient and stable sources of revenue for the nation’s development.” (I guess it is fair enough to give room for the new government to tell us in full what are the focus and direction moving forward for many years in future.)

While waiting for that to happen, here’s a request from a developer.  EcoFirst Consolidated Bhd group chief executive officer Datuk Tiong Kwing Hee said the additional tax could weigh heavily on the current sluggish property market. He said, “We believe continued focus on housing affordability is still needed and hopes the government will allow provisions that will help Malaysians buy homes and secure housing loans.” Here’s that article in NST: “Please, no extra real estate tax 2019 Budget: EcoFirst.  EcoFirst had a good quarter. It posted a net profit of RM4.7 million despite a soft market. Tiong said its flagship development, Liberty@Ampang Ukay Phase 1, was 95 per cent sold, contributing to the results. He added, “This demonstrates EcoFirst’s ability to tap into underserved segments of the market, producing the right products to meet customers’ demand.” 

Tax or no tax, I am more looking forward to how the current unsold units in the market could be cleared faster. Many analysts pointed out that there’s mismatch in terms of pricing and location and these have contributed to the units being unsold. Actually, if we look at it from the state by state basis, it’s not that disastrous looking for both Selangor and KL. Please do take a look at the image and the % of unsold units based on state versus the Malaysian average. Perhaps the policymakers should now really look at what’s needed by the market before approving any new developments? This will help tremendously in reducing the number of unsold units almost immediately. Current number of unsold units continue to spook the market. Imagine a first-timer looking at potential properties and they kept being bombarded by the number of unsold units… Happy understanding.

written on 28 Oct 2018

Next suggested article:  New taxes to pay. Small kitten back to Asian tiger?

 

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