Vacancy tax possible answer to property glut issue?
The implementation of a vacancy tax could be a key factor in addressing the issue of vacant and unsold housing units across Malaysia.
Khazanah Research Institute’s Theebalakshmi Kunasekaran said this tax is imposed on housing units that remain unoccupied or unused for a certain time period.
It is usually calculated as a percentage of the gross selling price of these units, which means the higher priced housing units will have a greater corresponding tax amount.
She noted in a report the aim of this tax is to encourage developers to be more cautious when planning housing projects.
“They would be prompted to undertake a comprehensive feasibility study to analyse the local market demand and provide housing that caters to the diverse needs of different population segments.
“This can prevent oversupplying products that can contribute to the property glut,” she said.
According to Theebalakshmi, this tax will also discourage speculative activities by people who hold units to make quick profits.
Meanwhile, Theebalakhsmi said vacant units not only are left idle, but also impact resources and neighbourhoods in terms of development. She said when there are overhang units, there is less utilisation of public transport services which will place a strain on public resources.
“Additionally, the presence of unoccupied units can also lead to disinvestment in townships by discouraging property developers and businesses from investing in the neighbourhoods,” she said.
Theebalakhsmi concluded the vacancy tax will push developers and homeowners to start selling or renting their empty units to avoid paying the tax.
“Consequently, this will provide home buyers with access to affordable housing options as developers lower their price through ‘fire sales’ to clear the glut.”
Source: TheStar.com.my
This is common sense approach. Simple yet genius. This need to be imposed immediately. In fact, it should’ve been the case decades ago. Especially in Penang, property developer are WAY TOO OVERPOWERED. They are like GOD now.
How much can you tax them? Do you even know how filthy rich those property developer are? They will easily leverage between the taxes paid, versus their overpriced overhang unit. In conclusion, no effect to them at all. Just pay some pennies to get things done.
seriously? you want to restraint the developer by punishing the house buyer? why not simply not approving new project ? the government the culprit lar blindly approve projects.. let market forces determine the market price, price will come down naturally when there is over supply.. why you care if people have the mean and want to hold on to their vacant property…really busy body
how you determine vacant, if use it for storage, or park my car, or a place to meet mistress, will it consider vacant ?
It is actually a very good idea to introduce a vacancy tax and I believe this is not the first time it’s being talked about. But as usual, the problem in Msia is enforcement. Same for that big hoohaa about the ban of Airbnb. Yes, you have the law there, but you actually still see rampant airbnb at residential condos. Why? No gov enforcements, and also neighbors cant do anything if property manager is too lazy to take action. That’s the problem in Msia, Madani thus Madani that, in the end, back to square one.
Well. I agree that approving new project will have more impact. These overhang units by property developer has no problem holding these unit vacant forever. Since government don’t allow new project to be built, buyer only got this option or wait until overhang unit found its victim
Just learn China limit developer gearing la duh. Ez.
Those no-money mia developers do not allow holding so much land or pre-sales so damn long.
If developers get unlimited bullets, surely they tembak as many as possible, without caring about quality or overhang units.
Limit their loan and gearing, then they will plan wisely their project next time, small heads don’t wear so big hats.
@WC_Ong
I can’t get MM2H unless I’m earning millions. I can’t put my property on AirBNB. I can’t get a great return from the long term rental market.
So it will be vacant for probably half the year.
Now, impose vacancy tax and see how quickly I sell it.