There are a lot of goodies for the betterment of the quality of life for Malaysians in the Bajet 2014 delivered by Prime Minister Dato’ Sri Mohd. Najib Tun Razak less than an hour ago. One important ‘Big Ticket’ item of Bajet 2014 is housing.
First all, Federal Government is committed to realize Barisan Nasional’s promises in the 13GE Manifesto (Aku Janji Pilihanraya) where 1 million homes were to be built in the span of five years. Prime Minister Najib announced that 220,000 affordable homes would be built under the various scheme and programs by agencies such as PR1MA (80,000 homes), SPNB (26,122 homes) and so forth.
All of these are targeted for the low, middle-low and middle income Malaysians. It is clear the grievances of Malaysians across the board about home ownership have been noticed and steps being taken to rectify the problem.
The second one is the attack against homes getting more and more outside the range of affordability. One of the issues that loom the continuous escalating price of homes especially in the urban and high growth areas is caused by speculators.
Real Property Gains Tax (RPGT) is the tool being sharpened to reduce the speculators. For gains on properties disposed within the holding period of up to 3 years, RPGT rate is increased to 30%, whereas for disposals within the holding period up to 4 and 5 years, the rates are increased to 20% and 15%, respectively. For disposals made in the sixth and subsequent years, no RPGT is imposed on citizens, where as companies are taxed at 5%.
It is not as stiff as how we proposed it about a year ago. Never the less, RPGT would definitely curb a lot of the property punters who worked on getting rid of their prize the moment the certificate of practical completion is obtained.
Another important point announced in this budget is the Federal Government subsidy of low and middle cost range of properties developed by private developers. A special Private Affordable Ownership Housing Scheme ‘MyHome’ is introduced. A maximum subsidy of RM30,000 per unit would be given in a mechanism that would be defined later.
The quality of homes has also been increased. The entry level of housing has been defined at 800 sq. ft consisting of three bedrooms and two bathrooms. The “Rumah Mesra Rakyat” would be introduced where it would be priced between RM45,000-65,000 each.
The middle range homes would be same configuration, but a built up area of 1,000 sq. ft. and priced in the neighbourhood of RM 175,000.
Projects under this MyHome scheme would have the condition of 20% low cost and 20% medium cost homes in the development composition. Mandatory facilities include ample parking, surau, multi purpose hall and children playground.
Under the MyHome scheme, the monthly income qualification for first time buyers for the low cost home is RM3,000 where as the medium cost home is RM 6,000.
In this budget Prime Minister Najib also announced the special funding of RM 100 million under 1Malaysia Maintenance Fund for maintenance and upkeep of homes for the low income Malaysians. Those homes classified as Projek Perumahan Rakyat would get make overs and upgrade in maintenance services.
The sixth point is the Facilitation Funding. RM 4 billion has been provided for the Housing Facilitation Fund (Dana Mudah Cara) to promote public-private sector. RM 1 billion of that would be specifically for qualified entities which include private companies need to apply and the fund would be managed and dished out via the Unit Kerjasama Awam-Swasta (UKAS).
The seventh point is that Prime Minister Najib announced a special grant for private developers building homes for ownership of civil servants. Placed under PR1MA, 10% of the project development cost could be obtained from the Facilitation Fund and under the 1Malaysia Civil Servants Housing Project.
The rehabilitation of abandoned housing projects would get special fund of RM82 million, to rescue 20 identified abandoned housing projects and realise 8,197 families to get their homes.
The eighth point which Prime Minister Najib announced is the inception of National Housing Council. It would look into issues which include land price mechanism and rationalisation of home prices.
It is definitely a very good budget, for the home makers, home owners, aspirant families owning their first home and even those who want to upgrade to a better quality of life.