Property Specialist in Johor Bahru, Johor, Malaysia

PETALING JAYA -  The property development sector will face some challenges this year with new measures coming into effect but the volume of transactions is likely to be adequate in ensuring stability in the market, said Etiqa Insurance & Takaful head of research Chris Eng. "Looking at fundamentals, the property market will still be okay this year, especially for landed properties. There have been measures to remove speculation but these do not really affect landed properties," he told  SunBiz  in an interview. Some of the measures announced in Budget 2014 include the banning of Developer Interest Bearing Scheme (DIBS), increase in real property gains tax (RPGT) and the implementation of the Goods and Services Tax (GST) in April 2015. Effective today, property developers will no longer be able to offer DIBS to buyers and the RPGT rate will be 30% for gains on properties sold within the first three years while disposals in the fourth and fifth years will be 20% and

With three major policies detailed in the 2014 Budget set to be put into effect between January 2014 and April 2015, the property market is set to deal with an array of changes. The biggest and arguably most discussed, policy is the increase of the Real Property Gainers Tax (RPGT) from 15% for two years to a whopping 30% for a period of three years. The banning of the Developer Interest Bearing Scheme (DIBS) and Goods & Services Tax (GST) are also set in place. We take a look at both sides of the coin before its looming implementation. Doubling the RPGT At a glance it may seem that the RPGT will hit first-time home buyers the most, but a closer look will reveal that property ‘flippers’ will be the ones who feel the pinch most. Increasing the rate of 15% for two years to 30% for three years effectively removes the convenience of buying and selling properties for a quick profit. Disposals after four years and five years will be increased to 20% and 15% respectively. This increa

Property sector-wise, expecting only RPGT hikes for Budget-2014 . For the upcoming Budget-2014’s potential impact on property sector, we are only expecting RPGT hikes (30% from 15% for properties sold within 2 years, 15% from 10% for properties sold within the 3-4 years, 10% remains unchanged for properties sold in the 5th year and zero RPGT for properties sold in the 6th year onwards). We believe this has been largely been discounted and priced-in somewhat, but we do expect some slight knee-jerk reactions for a couple of weeks post announcement. We do not expect any other overly harsh measures (e.g. stamp duty hikes, banking measures) as these may have severe repercussions on the economy. Historically, the government only implements one drastic fiscal measure within a year. This also applies to Bank Negara Malaysia’s (BNM) measures and so far, we have already seen one i.e. reduced mortgage tenures to 35 years from 45 years in Jul-13. We also expect more measures on increasing afford