The Ultimate Budget 2019 Property Guide

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It looks like 2019 will be a pretty good year for the Property sector, especially for First Time Home Buyers and the B40/M40 households, with the implementation of Budget 2019.

A reliable property portal cited that in order for a household to afford the average all-house price in Malaysia which is RM387,258, the household will have to earn an average of RM10,757. With that statement, it’s safe to say that many of us who are either new to adulthood or have been struggling with it for a while may not be able to afford a property for a while.

This is where the Budget 2019 comes in. The budget not only aims to empower the B40/M40 community by creating affordable housing while ensuring a more stabilized property market, but also to assist in financing residential property purchases. First Time Home Buyers are also on the receiving end of this budget, with mortgage guarantees and certain tax exemptions.

Let’s break it down further:

First Time Home Buyers:

  • Mortgage guarantees for those earning an average income of RM5,000 and below.
  • Stamp Duty exemption of up to RM300,000 on residential property purchases up to RM500,000.
  • Crowdfunding initiative by Private Sector to assist First Time Home Buyers in purchasing their property.

B40 & M40 Community:

  • A RM1.5 billion allocated to affordable housing for these 2 sectors.
  • Rehda has promised a more stable fluctuation in property prices
  • SST exemptions on construction services and building materials to help reduce property prices.
  • Exemption of Real Property Gain Tax (RPGT) on properties below RM200,000.
  • A fund of RM1 billion established by Bank Negara Malaysia to help households with the average income of RM2,300 and below to own a home.

Additional Aspects (in order to reduce the crazy amount of overhung units in Malaysia):

  • Stamp Duty charges waived for unsold units priced between RM300,001 to RM1 million with a minimum discount of 10% by developers.
  • Rehda has also pledged a 10% reduction on overall housing prices.
  • Real Property Gain Tax increments for both residents (increased to 5%) and non-residents (increased to 10% in the sixth year & above.).
  • Stamp Duty for property transfers costing more than RM1 million raised to 4%.

That’s a lot of wins for a lot of people, though there are some who unfortunately do not just not benefit from this budget but also lose a little from it.

Winners:

B40 Community: Financial aid along with the raise of minimum wages aimed to assist in coping with the raising prices of residential properties as well as the standards of living.

First Time Home Buyers: Financial aid along with mortgage guarantees to assist on financing residential properties. Along with the development of more affordable residential properties, the National Home Ownership Campaign boasts a 10% discount on existing unsold properties. 

Developers: SST exemptions on construction materials to assist on the reduction of property prices.

Losers:

Property Investors: With RPGTs being raised especially for higher priced properties, real estate investors clearly have the least to shout about and are taking the biggest tax bite compared to everyone else. 

Oh well, it’s like what they say. You win some, you lose some.

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Written by: Renu




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