Foreigners looking to buy a home in Johor will face significantly
higher charges from next year when the current RM10,000 (S$3,900) charge
is replaced with a processing fee based on a percentage of the
property’s value.
State Executive Councillor for Housing and
Local Government Datuk Abdul Latiff Bandi said the move had been made to
protect the interest of Johoreans and the processing fee would apply to
all foreigners wanting to acquire properties in the state.
He
noted that the new processing fee, which would range between four and
five percent of the property value acquired, would indirectly enable the
state government to regulate the sale of properties to foreigners.
“For
instance, foreigners buying a property worth RM5 million (S$1.95m),
they have to pay only RM10,000 (S$3,900) as processing fee currently.
From next year, they have to pay based on the property value,” said
Latiff after opening a seminar on Green Industry 2013 yesterday.
Proceeds from the fee will be used by the state government for programmes and projects aimed at people’s development.
“We
will table the new condition in the budget sitting of the state
legislative assembly, which will sit soon, for approval,” he revealed.
Khalil Adis, Associate Research Director (Iskandar Malaysia) for Ascendant Assets, said: “The new levy of between 4 to 5 per cent will have a significant impact on Singapore-based investors as it will translate to almost double of what they have to pay now. For example, for a RM500, 000 property buyers will need to pay up to RM20,000 in levy as opposed to the flat rate of RM10,000 currently.
“We expect some Singaporeans currently sitting on the sidelines to expedite the signing of their sales and purchase agreements so as to save on the new levy. Going forward, it may affect sales volume in the red hot property sector of Iskandar Malaysia during 2014, particularly in Nusajaya which is primarily driven by foreign purchasers.”
However Gerard Kho, Country Manager for PropertyGuru Malaysia, felt the new foreign property purchase tax will likely have little impact on the number of Singaporeans buying in Johor.
He said: “This move has been in the pipeline for a while. Long term property investors will not be impacted by these additional costs.”
Farah Wahida, Editor of PropertyGuru, wrote this story. To contact her about this or other stories email farahwahida@propertyguru.com.my
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