Following the announcement of the latest tax policy in Johor which will see foreign buyers paying higher charges from next year, analysts and industry players expressed mixed reactions on how the policy is going to impact the market.
Yesterday, the state government of Johor announced that the current
RM10,000 (S$3,900) charged to foreigners buying in the state would be
replaced with a processing fee based on a percentage of the property’s
value beginning next year.
Sigrid Zialcita, Managing Director (Research, Asia Pacific) at Cushman & Wakefield, anticipates an impact in the sales volume and expects buyers to scale back on their purchases.
“Investors would likely pull back in the short term as they step back to evaluate the impact of the tax especially on future property values,” she added.
Alpha Marketing co-founder and Director Ryan Khoo said: “The proposed move (of a) four to five percent flat tax rate is quite a big amount compared to what we have today and this will drive away a significant number of investors both local and foreign. The pool of buyers will be smaller and this will be bad for the market.”
Also expecting an impact on the market is Getty Goh, Director at Ascendant Assets, who noted that with the latest curb and high property prices, some investors may now “think twice before buying (in Johor).”
However, other members of the industry do not believe the policy will have a long-term impact on the market.
Shawn Tan, CEO and Key Executive Officer at Masters of Real Estate (MORE) said: “Foreign investors may take a breather and reaction time to accept the new taxation but that shall not deter them by the many choices of available projects in Malaysia.”
Agreeing, Tan Sri Dato’ Sri Leong Hoy Kum, Group Managing Director and Chief Executive of Malaysian developer Mah Sing Group said: “This is a one-time fee and we believe that genuine investors will continue to see the long term value proposition of owning a quality property by branded developers with good track records, in a prime location like Iskandar Malaysia.”
According to State Executive Councillor for Housing and Local Government Datuk Abdul Latiff Bandi, the new processing fee, which would range between four and five percent of the property value acquired, would apply to all foreigners wanting to buy properties in Johor.
He noted that the move is to protect the interest of Johoreans and would indirectly enable the state government to regulate the sale of properties to foreigners.
Nikki De Guzman, Junior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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