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LBS: Make HOC a permanent fixture to aid in the recovery of the housing market

Published: Tuesday, 05 October 2021
LBS Bina Group Bhd executive chairman Tan Sri Lim Hock San.

LBS Bina Group Bhd hopes the Home Ownership campaign (HOC) will be a permanent fixture in the housing market.

The HOC has been a welcome boost for property developers in generating property sales as consumers became more cautious because to the Covid-19 outbreak, according to executive chairman Tan Sri Lim Hock San.

LBS has seen the good influence of the HOC on the property market as the country returns to pre-pandemic normalcy, according to Lim.

He hopes the government will consider making the HOC permanent, combined with a stamp duty exemption of up to RM1 million on the first RM1 million of a property's purchase price.

"This will ensure the entire supply chain of the construction and property development industry will continue to carry on without disruption while buying sentiment remains," he said.

LBS is hopeful that the government would announce the HOC and a full stamp tax exemption in Budget 2022, which will be tabled in Parliament on October 29, 2021.

"We hope that Budget 2022 will consist of the right stimulus policies to improve the property development sector as well as support homebuyers' quest to purchase property," he said.

According to Lim, the market has been sluggish as a result of the epidemic and the introduction of the Movement Control Order (MCO), which has created anxiety among investors.

He said with the correct government assistance, this may lead to a rise in Malaysian homeownership.

The developer's wish list also includes relaxation of requirements for the Malaysia My Second Home (MM2H) Programme.

Lim said MM2H has created a positive effect in attracting foreign nationals to settle in Malaysia.

'While the group welcomes its relaunch, we believe that the recent revisions to the MM2H Programme requirements for new applicants may be too stringent and instead deter foreigners from choosing to work and live in Malaysia," said Lim.

He also hoped that the government will consider a few proposals to strengthen the MM2H Program, such as lowering the qualifying minimum income for an application to the initial RM10,000 per month and lowering the required amount of liquid assets to RM500,000 from RM1.5 million.

According to Lim, LBS is also recommending to the government that the minimum amount of fixed deposits in a Malaysian bank account be reduced to RM300,000 from RM1 million, and that the MM2H pass be kept at 10 years.

"We believe these proposals are sufficiently stringent to attract skilled foreign nationals and ensure the continued success of the MM2H Programme," he said.

Lim is also hoping that the government will consider extending current tax incentives to existing IBS participants rather than limiting them to new players exclusively when it comes to the implementation of the Industrialised Building System (IBS).

The potential of lowering compliance costs, additional incentives to offset growing material costs, lowering the minimum threshold for foreign property ownership, and a waiver of the levy on foreign labours in the construction sector are also on LBS's wish list.

Developers are responsible for compliance fees such as development charges, land conversion premiums, and strata title applications.

Any savings from these steps, according to Lim, would be tremendously advantageous and could be passed on to homeowners in the form of a lower price point.

He also said the fluctuations and rising cost of building materials such as steel and cement will likely hurt the cost of housing.

"To illustrate, the price of steel increased between 25 per cent 30 per cent over two months from November 2020 to January 2021. The price volatility increases the pressure on contractors and developers as they are faced with additional costs from both building materials and SOP compliance costs," said Lim.

To combat this, LBS hopes the government would consider imposing a charge or imposing strict pricing controls on building supplies, according to Lim.

"We hope this will prevent developers from passing on higher material costs to households," he said.

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