Mah Sing’s Leong calls for government measures to help first time home buyers

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KUALA LUMPUR (Sept 30): With the upcoming Budget 2015 to be tabled in less than two weeks, Mah Sing Group Bhd’s Managing Director and Chief Executive Officer Tan Sri Leong Hoy Kum has asked the government to consider implementing certain measures to help first time home buyers.

“In line with the government aspiration and to assist first-time property buyers, we would like to request that Developer Interest Bearing Scheme (DIBS) should be allowed for first time home buyers,” said Leong in a statement today.

According to him, DIBS could bridge the gap for genuine homebuyers who will be able to afford their first home in two to three year’s time, by allowing them to lock in properties at current prices.

“With increasing salary in two to three years when the property is completed, the repayment capability of purchasers would have increased,” he added.

DIBS, a scheme where developer would pay for the interest cost on behalf of property purchasers during the construction of property, was prohibited following last year’s budget.  

Meanwhile, Leong has also asked the government to extend tax relief to all interest incurred on end-financing for the first home.  

Alternatively, he suggested for the government to consider providing grants of up to 10% of the purchase price of affordable properties, to first time home owners, so that it will be easier for them to own their first property.

On top of that, Leong also hopes that the government will extend the 50% stamp duty exemption for first time buyers of properties below RM400,000, and maintain its stamp duty rate of 3% for portions of the purchase price exceeding RM1.5 million, as “any increase would add burden to owning homes”, he said.

On matters concerning the goods and services tax (GST), Leong echoed the request from Real Estate and Housing Developers Association (Rehda) that all types of contracts made prior to the announcement of GST (on Oct 25, 2013, where the 2014 Budget was announced), be entitled to zero-rating during the transition period.  

“For SPAs (sales and purchase agreements) of land entered prior to April 01, 2015, payments received or invoices issued prior to April 01, 2015 should not attract GST, if the supply of land is made after April 01, 2015,” said Leong.

“GST is a good measure; however there is a need to allow for a transition period for the long term sale agreements and construction contracts spanning over the implementation date of April 01, 2015,” he said.

Leong also requested that residential properties priced up to RM1 million be zero rated.  “This will mitigate increased cost and provide status quo opportunities for target groups”.

Leong said he welcomed the government’s various initiatives to encourage home ownership, and are cognizant of the government’s concerns about the affordability of properties.  

“However we would like to reiterate the view that house price increases are due to demand exceeding supply in good locations, as well as cost pushed inflation,” he said.