Vacancy tax is coming if we read all the signs from the many articles in mass media (and blog..) Is vacancy tax truly needed? This was an earlier article on vacancy tax: Vacancy tax will crash the property market? (click to read) Perhaps a better question would be is vacancy tax truly needed for property market Malaysia, today or in the near future or even in 2021 as per what was announced by Minister of Housing and Local Government Zuraida Kamaruddin. She also mentioned that this tax will help to persuade developers to be more sensible and responsible when they do projections for their projects, especially high-rise developments.
Article in edgeprop.my The Housing and Local Government Ministry (KPKT) is formulating a tax that could be imposed on developers who fail to sell their properties as early as 2021. This is aimed at reducing overhang of residential units in the country. Minister of Housing and Local Government Zuraida Kamaruddin shared that the introduction of the vacancy tax DOES NOT require Parliament’s approval as there are no amendment to the existing Act.
She said that as soon as the new tax decision is approved by Cabinet, KPKT will look at implementing the tax as early as 2021 as per news report on Malaysia Reserve. She said, “So, as long as the units obtain the Certificate of Completion and Compliance (CCC), and yet they are unable to sell the units or the units failed to be filled, the developers will have to pay.
“In the future, they will do better projections when they develop houses, while ensuring the projects’ viability and developments that could attract buyers, and not just develop as they wish. With this preventive measure, they can plan better.” Please do refer to the full article here: Article in edgeprop.my
By the way, I agree that if owners purposely left their units empty and refuse to rent it out, they should be taxed with this vacancy tax. By not releasing the unit for rental, they are causing the home supply to be reduced and rental to go up. This vacancy tax should then be levied on these owners whether they are developer or individual owners. It can be both primary or secondary market. Both are as bad if it was done on purpose. Anyway, this is not something new and has been implemented in many countries.
Anyway, we will await for more details because I have yet to read on how the mechanism would be and also whether it will be approved by the cabinet. Will write about it if there are further news. As for implementing this suddenly and aimed at unsold units from developers, let’s just note that this may not just affect the developers yeah. Home owners who bought the same project earlier may also be affected too. So, this has to be taken into consideration too.
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