The new housing rules from Feb 1, 2014 is to protect Penang from being adversely affected by a property bubble as well as to ensure that public housing and affordable housing are bought by genuine purchasers who are qualified first time buyers from lower and middle-income groups

The Penang state EXCO during its last meeting refined the new housing rules as follows:

1. Public Housing – Low Cost and Low Medium Cost Housing

All low cost homes (up to RM42,000) and low-medium cost homes (up to RM72,500) purchased can not be sold for 10 years. Those who wish to sell during the first 10 years must appeal to the state government and can only be sold to “listed buyers”. Listed buyers are those who have registered with the Housing Department of the state government and are certified as low income groups that are qualified to purchase low-cost or low-medium cost housing. This 10 year rule will cover all past and future purchases. The balloting of houses will be subject to oversight by an auditing firm.

2. Affordable Housing

Affordable housing is classified as houses which were initially purchased below RM400,000 on the island and RM250,000 on the mainland. Affordable housing purchased can not be sold for 5 years. Those who wish to sell during the first 5 years must appeal to the state government and can only be sold to “listed buyers”. Listed buyers are those who have registered with the Housing Department of the state government and are certified as middle-income groups that are qualified to purchase affordable housing. This 5 year rule will cover all past and future purchases. The balloting of houses will be subject to oversight by an auditing firm.

3. Purchases by Non-Citizens

Non-residents can only purchase properties in Penang in excess of RM1 million and for landed property on the island must exceed RM2 million. All purchases of properties by non-residents will be subject to a 3% levy on the transacted price from Feb 1, 2014. Exemptions are provided for purchases for industry purposes or for a purpose that promotes employment, education, human talent or promoting Penang as an international intelligent city.

4. 2% Levy on Property Purchased after Feb 1, 2014 Sold within 3 years

A 2% levy will be imposed on the seller for all property sold within 3 years from the date of the Sales & Purchase Agreement (SPA) signed from Feb 1,2014. In other words, this is not retrospective. Properties bought with the SPA signed before Feb 1,2014 will not be subject to this levy. Only properties bought with the SPA from Feb 1, 2014 will be subject to the 2% levy if sold within 3 years. This 2% levy is not applicable to affordable housing.

Preliminary discussions were held between some property players and house buyers but the state government is prepared for further discussions with all stakeholders.

Source: Bulletin Mutiara