Guidlines on property owned by foreigners
Nov 13th 2018, 1:21 am
#1
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Guidlines on property owned by foreigners
Govt to review quota on property ownership by foreigners: Zuraida
The Housing and Local Government Ministry will review the quota of property ownership by foreigners to be used as guidelines for developers and state authorities, the Dewan Rakyat was told today. Its minister, Zuraida Kamaruddin, said so far, property owned by foreigners in the country had yet to exceed one per cent......In efforts to curb land or property purchase by foreigners, she said, the ministry, through Budget 2019, had also set a new limit, where the Real Property Gains Tax rates would be revised from five per cent to 10% for disposals of properties or shares in property holding companies after the fifth year for companies and foreigners.She said the stamp duty on the transfer of property valued at more than RM1,000,000 would also be increase from three per cent to four per cent. — Bernama
Nov 14th 2018, 1:27 am
#2
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Re: Guidlines on property owned by foreigners
So a minimal amount of property is actually owned by foreigners, but it needs to be curbed?
I'm wondering how the Real Property Gains Tax would impact MM2H participants who are seeking to leave the program...would it not impact those already IN the program?
And, since it is a tax on the SALES end (not the purchase end) wouldn't it actually discourage the transfer of foreign-owned properties to local purchasers? Actually it would discourage the transfer of property by everyone. The increase in tax is general, isn't it? Not specifically directed at foreigners. And sellers would likely simply increase the sale price to accommodate lost profit. So prices go up.
Now the increase in Stamp Duty on RM1m properties would seem to be a factor in increasing the cost of purchase, but this also seems directed at everyone purchasing RM1m properties (not just foreigners). True in some States MM2H'ers and other foreigners have a floor of RM1 million...and in those States it could be an additional cost. But it will also affect Malaysians purchasing >RM1m properties.
I'm wondering how the Real Property Gains Tax would impact MM2H participants who are seeking to leave the program...would it not impact those already IN the program?
And, since it is a tax on the SALES end (not the purchase end) wouldn't it actually discourage the transfer of foreign-owned properties to local purchasers? Actually it would discourage the transfer of property by everyone. The increase in tax is general, isn't it? Not specifically directed at foreigners. And sellers would likely simply increase the sale price to accommodate lost profit. So prices go up.
Now the increase in Stamp Duty on RM1m properties would seem to be a factor in increasing the cost of purchase, but this also seems directed at everyone purchasing RM1m properties (not just foreigners). True in some States MM2H'ers and other foreigners have a floor of RM1 million...and in those States it could be an additional cost. But it will also affect Malaysians purchasing >RM1m properties.
Nov 14th 2018, 1:52 am
#3
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Re: Guidlines on property owned by foreigners
@RedApe Agreed, it doesn't seem to add up to a coherent policy. I can see good reasons for limiting massive inward investment in real estate (see New Zealand for an example of how that hugely increased house prices), but in Malaysia it's a drop in the ocean. In a couple of years' time there is likely to be an even larger glut of condo supply, at least in KL where they are building them like crazy, yet most of them will be below the 1M threshold and foreigners will not be able to help out the property developers by buying their empty units. At that stage we may well see some policies reversed.
Nov 18th 2018, 7:57 am
#4
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Re: Guidlines on property owned by foreigners
I've been trying to sell my property in KL this year and the market is just not moving, so increasing the price to cover the increase of tax is not an option, actually I've already dropped it by RM150k and still no takers! Just like the more than doubling of fees for foreigners dealing with JPJ to renew driving licences etc and the tourist tax, this is just another lazy way of increasing tax revenue by targeting a group that doesn't vote and can't complain! It's really sad and pathetic to see the new government is still using Najib's play book! This just confirms my decision after 20 years in this country, it's time to move on, as I'm sad to say the pace of change is just too slow. I'd even go as far to say that over my time here I've witness the majority race move backwards and become more insular. I think I will just keep the place as a holiday home and wait till the market picks up. I would advise anyone considering buying property to think long and hard first and have a long term view.
Nov 18th 2018, 2:30 pm
#5
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Location: Kuala Lumpur
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Re: Guidlines on property owned by foreigners
Agree with what hans8 said, there is a huge over supply of property in KL but the government continues to approve new development that don't even meet their own guidelines. It's quite ridicuous. I would never buy a property here for investment. It only makes sense to buy if you want to live in it.
