News: Minister Sees No Need For Vacancy Tax For Now

Aug 14, 2020

Deputy Federal Territories Minister Datuk Seri Edmund Santhara Kumar said there is no need to impose vacancy tax on unsold units of luxury condominiums within the Klang Valley, given that the number for such units is low.

A vacancy tax is a penalty charged on any property that is left vacant and unsold for a certain period of time.

“From the ministry’s point of view on the proposal to impose such tax, since the number of unsold units is less than 4% to date, there is no need for now but such a proposal would be studied further,” he said in the Dewan Rakyat as quoted by Malay Mail.

Read this guide on the 3 property buying trends that emerged since the OPR cut this year. 

Edmund made the statement in response to Datuk Hasanuddin Mohd Yunus’ (PH-Hulu Langat) question on whether the government would impose such tax, like other major cities such as Melbourne in Australia and Vancouver in Canada.

Citing National Property Information Centre (NAPIC) data, Edmund said the Klang Valley has 2,260 unsold condominiums, of which 498 are luxury units worth RM1 million and above as of 2018’s second quarter, reported Malay Mail.

He noted that among the factors contributing to the accumulation of unsold luxury condominiums were the inability of buyers to secure financing loans as well as the mismatch in supply and demand.

He explained that the issue should be addressed holistically by all parties involved including Bank Negara Malaysia and the Finance Ministry.

He added that the Kuala Lumpur City Hall (DBKL) will also consider the demands and necessities when issuing planning approvals for development project within the city.

“The Kuala Lumpur Structure Plan 2040 (KLSP40) will definitely be a part of the reference and basis of consideration for those involved in decision-making in relation to development issues,” said Edmund.

On whether the government would amend the floor price of properties for foreign buyers, Edmund said the decision for such issue comes under the Finance Ministry’s purview.

Last year, then Finance Minister Lim Guan Eng lowered the face value of property for foreign ownership to RM600,000 from RM1 million previously.

On Che Alias Hamid’s (PAS-Kemaman) supplementary question on whether a moratorium would be imposed on luxury property development projects due to oversupply, Edmund said DBKL would thoroughly study the KLSP40 to ensure that there would be no glut.

 

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