LBS looks to Budget 2023 to stimulate the real estate sector

As the date of October 7 to present the 2023 Budget in Parliament approaches, LBS Bina Group Bhd (LBS) has a wish list that it hopes the Government will consider for the real estate sector.

Although hailed as the year of recovery for many economies around the world after two years of pandemic restrictions, 2022 is proving equally difficult due to a shortage of workers, rising interest rates, and rising property prices. raw Materials.

However, LBS commends the government’s efforts to ease the burdens on homeowners and stimulate the real estate sector with various initiatives, including ongoing ones such as the Keluarga Malaysia Homeownership Initiative (i-MILIKI), which will be in force. until the end of December next year.

Waived stamp duty for first-time homeowners with properties priced at RM500,000 or less, as well as a 50% stamp duty exemption for properties between RM500,000 and RM1,000.

LBS is hopeful that more can be done and proposes that the Government consider the following measures in the next budget to further stimulate the real estate sector, which in turn can revitalize the Malaysian economy.

Home Ownership Campaign (HOC)

LBS applauds the Government’s HOC initiative introduced in 2019, which was well received and stimulated home ownership, while reducing unsold properties within the country.

First-time homeowners benefited from a 10% reduction in the purchase price of homes and full exemption from stamp duty.

He hopes the government will reintroduce and implement HOC on a permanent basis as that may keep buying sentiments afloat as affordable housing continues to be in demand.

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Alternatively, the government may wish to consider offering rebates of up to 10% to first-time homebuyers to encourage and kick-start their plans for home ownership.

Subsidize the increase in the cost of raw materials

According to a survey by the Malaysian Real Estate and Home Developers Association (Rehda), construction costs are forecast to rise by an average of 19% this year.

Both developers and contractors face increasing cost pressure to maintain profits, and home prices may rise as these are passed on to buyers.

For that, LBS hopes that the Government can introduce subsidies or implement a ceiling on the prices of construction raw materials to help affordable housing prices remain intact.

Lower compliance costs

As a ‘people developer’, LBS places affordability at the forefront of all its developments.

That means developers end up bearing the costs of compliance and more, stemming from development fees, land conversion premiums, or applying for property titles.

But with rising commodity prices, the company hopes to reduce the compliance costs associated with developing a property.

The savings from these can be passed on to homebuyers through more affordable prices.

Greater environmental incentives

With the increasing importance of environmental and sustainability initiatives, LBS hopes that

The government may also consider giving environmental grants to developers.

This would encourage industry players to incorporate more green features into their developments, while also promoting the adoption of renewable energy.

The government may want to consider offering additional tax deductions, such as building owners.

they can enjoy income tax deductions equal to the additional capital expenditures needed to implement these environmental initiatives.

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Ultimately, this would encourage the adoption of sustainable methods and promote the efficient use of energy, water, and more, in a building.

Reduce purchase limit of foreigners in residential

As borders open, LBS anticipates a gradual increase in foreigners entering the country.

This may encourage other property developers to offer attractive packages at rock-bottom prices to attract them. Currently, foreigners can only buy properties above RM1mil.

If the Government can allow this limit to be reduced to RM600,000 in all states, this would allow

developers to reduce existing unsold units, while encouraging the entry of foreign ownership.

Budget expectations

Commenting on this, LBS Chief Executive Tan Sri Lim Hock San said: “We are hopeful that

The 2023 budget provides favorable measures for real estate developers.

“We believe that the proposals we have put forward would be a timely catalyst to fuel the recovery of the real estate sector in line with the general consensus of expecting 2023 to be a better year for Malaysia.

“In addition, it is an opportunity for the government to help the general public ease the burden of home ownership.”

He added that, however, LBS looks forward to the Government’s announcement and fully supports efforts to help more people own their dream homes.

“With the government making the important decisions to steer the country in the right direction, we believe all industry players will work together to ensure that the proposed incentives ultimately benefit home buyers.”

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