Home Ownership Campaign Back & Real Property Gain Tax Waived.
The Short-Term economic recovery plan or in Bahasa Melayu is Pelan Jana Semula Ekonomi Negara was announced today (5 June 2020), by our Prime Minister, Tan Sri Muhyiddin Yassin.
It’s a 19 pages long speech that craft carefully and detailing all the economic recovery plan for Malaysia for the next couple of months.
One thing that caught my attention is the unemployment rate of 3.90%, with 610,000 people are unemployed as at now. And an increase in the unemployment rate will be estimated at 5.50% ( over 860,000 people) by the end of 2020.
This figure is alarming because we never hit over 4.0% since 1994. So, we hope that this economic recovery plan will ease many people during this challenging period.
Okay, so we want to highlight the property market changes under the Short-Term economic recovery plan.
There are two significant changes.
A. Home Ownership Campaign (HOC) is back!
If you’re unfamiliar with Home Ownership Campaign (HOC), let’s refresh it.
The Home Ownership Campaign (HOC) is a government initiative designed to support homebuyers looking to purchase property while also spurring the sale of unsold properties by developers in Malaysia’s housing market.
The campaign ran the whole year in 2019. It was targeted to run from 1 January 2019 through to 30 June 2019, but was extended to 31 December 2019!
So, now it is back when announced by our Prime Minister today.
The brief criteria for Home Ownership Campaign (HOC) are as follows.
a. Period: 1 June 2020 – 31 May 2021
b. For Property Price: RM300,001 – RM2.5mio
c. Stamp duty exemption on Instrument of Transfer for the first RM1million.
d. Stamp duty exemption on the Instrument of Securing Loan up to RM2.50 mil.
e. With a minimum 10% discount from the developer.
Bonus under Home Ownership Campaign (HOC).
If you are buying a 3rd house under Home Ownership Campaign (HOC), you’re no longer subject to a maximum margin of 70% for your loan application. However, the property value has to exceed RM600k. And it’s still subject to bank’s discretionary loan approval.
B. Real Property Gain Tax (RPGT) Waived
Real Property Gain Tax or in Malay is Cukai Keuntungan Harta Tanah (CKHT) is a tax imposed on gains derived from the disposal of properties in Malaysia. It includes both residential and commercial properties, estates, and an empty plot of lands.
Or in more subtle explanation, Real Property Gain Tax is a tax payable by an individual that selling their property with a profit.
In the year of 2019 & 2020, the increase of Real Property Gain Tax impacts many property investors or property owners. It’s incurred additional cost, and investors are making less profit in their investment.
So, we believe many will welcome the announcement of Real Property Gain Tax WAIVED.
Let’s have a look at the criteria to entitle for the Real Property Gain Tax waiver.
The property must be under an individual name.
The individual must be a Malaysian.
Only applicable for residential property.
Entitlement Period: 1 June 2020 to 31 December 2021.
Limit to the first three units of the residential house per person.
By any chance, if you are a first-time house buyer and looking to buy a house this year from a seller, agent or anyone, please remember you can apply for a stamp duty exemption of transfer and Loan.
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