There were debates and there are still debates even after vacancy tax has been put on hold. The argument for vacancy tax is that it will force developers to be more stringent with their assessment before they build or price their products. This will help the market to have a more controlled supply of properties which the majority wants. This point definitely have its logic yeah.
However, we need to note that the vacancy tax is not proposed to help ensure future market becomes better. The vacancy tax which was proposed was aimed at the unsold units in the market currently. The planning part would have been completed way before this situation. Anyway, I have said the same in my article earlier but when some experts say something similar, we must quote them instead. Vacancy tax will crash the property market?
Article in freemalaysiatoday.com Henry Butcher CEO Tang Chee Meng says that the vacancy tax from the government will interfere with the property market. He said, “Housing developers in the country are already very regulated. Introducing the vacancy tax will add to the burden and cost of undertaking a property development project.” He also shared that if the vacancy tax is implemented, then the developers will be forced to dispose the unsold properties at a lower price and this will be unfair to the buyers who had bought the units earlier at a higher price. He added, “It is also not beneficial to the banks who had provided end-financing to the earlier buyers who bought at a higher price as the valuation would now come down.” Article in freemalaysiatoday.com
Well, I think the storm has passed for now? The Ministry of Housing and Local Government (KPKT) has said that they will think of other measures to counter the current issue if unsold units in the country and will not be using the vacancy tax to do it. They did not say they will never think of vacancy tax at all in the future yeah. Also there’s no guarantee that this measure could only be used against developers too.
By the way, in Australia, foreign owners who bought a home but uses it less than 6 months per year will be subjected to an annual vacancy fee. (click here to read). This is aimed at foreign buyers who bought and then left the property empty. Perhaps we could think of how to attract foreigners to purchase properties here and ‘encourage’ them to use it or tax them if they bought but did not use? That would be interesting. Let’s see whether there’s this potential in the near future.
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