Budget should help curb rising home prices

KUALA LUMPUR: The budget for 2013 should include measures to curb
spiralling home prices to assist the lower and medium income group and
make available more land for affordable housing.

The Senior
Executive Director PricewaterhouseCoopers Taxation, Steve Chia said the
provision of affordable housing remained at the top of the wish list
for the people.

He said there was a need to provide incentives and support to increase home affordability.

He
was also referring to a scheme for the lower and medium income group,
for which fine tuning was needed, in terms of increasing the
eligibility on household income, from RM2,500 per month to RM3,000.

"The
hope is also for more land to be allocated for housing, such as the
Prima or 1Malaysia people's housing project," he said during a media
briefing today on next year's budget.

Chia said another step in
the budget to encourage affordable housing is for developers to
contribute to a trust or foundation, which will coordinate
construction, allocation and maintenance of low-cost homes.

In
respect of incentives for first time homebuyers, he said, tax relief
should be given for interest expense incurred on loans and stamp duty
exemption for properties below RM500,000, to reflect prices in urban
areas.

Currently, a partial stamp duty exemption, is given for a first residential property not exceeding RM350,000.

To
curb spiralling property prices, Chia said, additional stamp duty
should be imposed on foreign ownership and acquisition of third
residential properties and more.

"There is also a need to re-introduce the Real Property Gains Tax (RPGT) as it was before 2010," he added.

Under the 2012 budget, the RPGT was set at 10 per cent for properties
held and disposed within two years and five per cent, if disposed after
two years and up to five years.

"Is this 10 per cent effective?
A lot of properties take two to three years to complete and by that
time, the rate would have dropped to five per cent," Chia said. --
BERNAMA