The Malaysian 2008 budget was tabled in Parliament two weeks back with numerous goodies for those shopping for a new home. The government hopes that these new measures would help stimulate the property sector in Malaysia.

For starters, the Stamp Duty for the Land Title Transfer for properties costing less than RM250,000 has been halved. This benefit is applicable for the purchase of one house for the whole of financial year of 2008.

Property           Price Stamp      Stamp Duty in 2007      Stamp Duty in 2008
House A            RM250,000              RM4,500                      RM2,250 (-50%)
House B            RM150,000              RM2,000                      RM1,000 (-50%)
House C            RM350,000              RM6,000                      RM6,000 (unchanged)

(Based on the current rate of 1% for first RM100,000 and 2% for RM100,001 to RM1,000,000)

With this new measure, I can foresee new home buyers benefiting in 2 ways:

• Significant Stamp Duty Savings
• Encouragement to property developers to provide more properties at sub RM250,000 price tag to entice home buyers to invest.

However new home buyers please note that in the home buying process, you will incur two major Stamp Duties namely the Stamp Duty for Title Transfer and the Stamp Duty for the Bank Loan Facility Agreement.

(Refer to Key Learnings – Lawyers Lessons 2 and Lawyers Lessons 3)

The Stamp Duty for the Bank Loan Facility agreement remains unaffected by the above changes. The current prevailing rates of 0.5% of Loan amount still prevails.

Read more »

The party for the Malaysia property market is expected to go on for the next two years, according to the president of the Malaysian Institute of Estate Agents (MIEA), K. Soma Sundram.

The measures introduced by the Malaysian government in the recent Budget 2008 will boost the property sector, attract foreign investors and to help the lower income to own their own home.

The measures are:

1. Reduction of stamp duty by 50 per cent for houses worth below RM 250,000.

2. Home owners can withdraw funds from their Employees Provident Fund (EPF) to pay for their monthly home loan.

Previously, the Malaysian government also abolished the Real Property Gains Tax (RPGT) to encourage more foreign investors to invest in properties in Malaysia. Read more »

Another piece of interesting news, highlighting the new property growth areas in the capital of Malaysia. This goes to show the trends in the property market in Malaysia.

Read on for the whole picture of the property trend. Read more »

This piece of news sounds like an opportunity to me. Why?

With many unsold Bumiputera lots up for sale only means that you could be getting some property at good location. The ‘unattractive pricing and location’ in the news refers to the pricing and location of their perception. I guess the perception varies from individuals to individuals. The unattractive pricing could be because those units are of higher-end, thus is pricier.

However, there could be some disadvantage though. Usually, Bumiputera lots are Read more »

Again, news about Japanese being keen on making Malaysia their Second Home surfaced in the papers. I guess they are as fascinated with the Malaysian culture as much as we are fascinated with their work culture.

We would indeed welcome them with wide arms, as they bring with them, their rich culture to this melting pot of cultures. Read my previous post on Japanese Retirees: Your potential new neighbour.
Read on for the article in the local paper, The Star.

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More Japanese keen on MM2H

——————————————————

PENANG: The Malaysia My Second Home (MM2H) programme is gaining popularity among the Japanese who regard Malaysia as the second most preferred retirement home after Australia, according to an MM2H agent.

Tropical Resort Lifestyle (MM2H) Sdn Bhd managing director Ishihara Shotaro said he expected the number of Japanese staying in Malaysia under the programme to double from the current 700 people to 1,400 in three years.

“We receive at least 30 enquiries about the MM2H programme daily and submit five to 10 applications a month for our clients.

“Penang and Kuala Lumpur are among the most preferred states for MM2H participants as they both offer good security and healthcare facilities,” he said.

He said Malaysia’s warm weather and diversity in its food and culture attracted many foreigners who wanted to experience a different lifestyle after retirement.

Ishihara said the company expected more Japanese to come in under the MM2H programme this year as baby boomers in Japan reach retirement age.

“There are about seven million Baby Boomers retiring this year and statistics show that 20% of them, or 1.4 million people, will seek a retirement home outside Japan,” he said.

Ishihara said the MM2H programme was a good income source for Malaysia as the participants spend an average of RM5,000 to RM7,000 a month in the country.

He added that 15% of the participants had bought property in Malaysia.

“They also promote tourism to Malaysia as many of their friends and family come for holidays while visiting them,” Ishihara said.

He said feedback from the 500 MM2H participants the company had handled was very encouraging as most of them found Malaysia an idyllic place.

Ishihara said many of the Japanese staying in Malaysia were looking forward to making friends with locals and learning some of the dialects such as Hokkien.

“We encourage local people, especially pensioners, who want to make new friends among the Japanese community to approach us.”

Those interested can call Tropical Resort Lifestyle at 04-2286540 for details. -The Star/Asia News Network

(note:US$1=RM3.50)

Great piece of news for house owners who intend to sell their property. The scrapping of the property gains tax would mean you get to pocket all the proceeds from the sale of your property, without having to share it with the government.

Quite a generous move by the Malaysian government, considering that the government will stand to lose tax revenue. However, this could actually boost the sluggish property market, as reports said.

Anyway, for you and me, it is good news and would certainly welcome it with open arms. One less headache to consider.

Previously, every Malaysian has one chance to be exempted from the property gains tax - on the sale of their first property. It applies to both gender, male and female, but the privilege for the girls will automatically be forfeited once the girl gets married. So, now it will be fair to both gender, which is good!

Read on for the news report on the scrapping of the property gains tax.

_____________________

By Chan Tien Hin and Stephanie Phang

March 22 (Bloomberg) — Malaysia has scrapped capital gains tax on property and will offer incentives to entice investment into the nation’s southernmost state.

Companies investing in tourism, financial services and certain other industries in the state of Johor, which neighbors Singapore, will be exempt from corporate income tax for 10 years, Prime Minister Abdullah Ahmad Badawi told an investment conference in Kuala Lumpur today.

Abdullah wants to encourage more investment to help boost growth in Malaysia’s economy, which has been outpaced by Singapore for 21 of the past 30 years.

The government expects the 382 billion ringgit ($109 billion) redevelopment of Johor to create 800,000 jobs in the next two decades and turn the area into an international destination for businesses and tourists.

“The incentives are very good on paper,” said Tan Teng Boo, who helps manage $100 million at Capital Dynamics Asset Management in Kuala Lumpur. “Still, it will be crucial to ensure that the follow-through and implementation of the project is efficient.”

The Kuala Lumpur Property Index gained 2.7 percent at the 5 p.m. close, outpacing a 1 percent gain in the benchmark Kuala Lumpur Composite Index. Selangor Properties Bhd., a Malaysian property developer, climbed 3.2 percent to 3.82 ringgit, while IGB Corp. rose 2.5 percent to 2.5 ringgit.

The April 1 abolition of tax on gains from property sales, first imposed in 1975, may cost the government 200 million ringgit a year, according to estimates by Sia Ket Ee, an economist at OSK Research Sdn. Removing the tax, which makes up 0.2 percent of government revenue, will help lure more foreign investments, he said.

‘Definitely Good’

The property measures are “definitely good” for the economy, said Quek Leng Chan, a Malaysian billionaire whose assets range from the Hong Leong Group to local cement producer Tasek Corp. and is estimated by Forbes to be worth $2.9 billion.

Growth in Malaysia’s $147 billion economy is expected to accelerate to a three-year high in 2007, the central bank said yetserday. Southeast Asia’s third-largest economy is forecast to expand 6 percent this year after growing 5.9 percent in 2006, Bank Negara Malaysia said.

The current capital gains tax on property is 30 percent within the first two years, falling to 5 percent by the fifth year, according the Inland Revenue Board’s Website. For foreigners, the tax starts at 30 percent for the first five years, and drops to 5 percent in the sixth and subsequent years.

Property Investments

“This is very good for the property and construction sector,” Suhaimi Ilias, an economist at Aseambankers Malaysia Bhd. in Kuala Lumpur, said of the measures announced by Abdullah today. “All these are what the market has been waiting for.”

Abdullah’s proposals may spur private investment in Malaysia, which Mohd Effendi Norwawi, Minister in the Prime Minister’s Department, today said declined 2 per cent in the five years to 2005. Norwawi expects private investment to increase 11 percent in the five years to 2010.

Malaysia started easing rules on property investments by foreigners in December, fueling speculation the country may introduce more measures to reinvigorate home sales as the central bank lifted its key interest rate three times between November 2005 and April 2006 to curb inflation.

Home sales in Malaysia fell to 85,153 units in the first half of 2006, 3.4 percent lower than a year earlier, the Real Estate Housing Developers Association said.

Foreign direct investments also fell 15 percent to 15 billion ringgit in 2005.

Transforming Johor

The decision to scrap the tax “is very good for the property industry,” said Choong Khuat Hock, who helps manage 400 million ringgit at Kumpulan Sentiasa Cemerlang Sdn. in Kuala Lumpur.

“Malaysia’s properties are one of the cheapest in Asia and they needed an impetus to crystalize the value. It shows the government is flexible and welcomes foreign investment.”

Malaysia is attempting to spur the development of southern Johor state, connected to Singapore by two bridges, by improving the region’s infrastructure. Singapore is attracting about $6.6 billion of investments from two casino-resort operators including Malaysia’s Genting Bhd., Asia’s biggest gaming company by market value.

The measures announced today are the latest in a series of incentives to encourage companies to plow funds in the country.

Malaysia has also cut its corporate tax rate to 27 percent from 28 percent this year, and offered incentives for real estate trusts and Islamic finance, where Malaysia is the world’s biggest issuer of Shariah-compliant debt.

Johor Chief Minister Abdul Ghani Othman told reporters today he’s expecting $40 billion of foreign direct investment in seven years in the Johor project, the so-called Iskandar Development Region.

Abdullah unveiled his plans at Malaysia’s biggest investment conference, attended by local investors and fund managers from cities such as New York and London.

Personally, I do think Malaysia as a very ideal place for retirement, especially if you love a simple yet rich-in-culture type of lifestyle.

There’s also so much lush greenery, enchanting forests, mesmerizing beaches, tropical sun and peaceful nature. A perfect getaway from the nail-biting cold of far-flung places in the world.

And yet, for those who still wants to get in touch with their cosmopolitan side, they could always hop down to the big cities, such as Kuala Lumpur which is also known as a shoppers’ paradise.
So, what are you still waiting for?

Sunday March 11, 2007, The Star

Time’s right for second home

BY FOONG PEK YEE

BERLIN: The time is now, the place is Malaysia.

This is Deputy Tourism Minister Datuk Donald Lim Siang Chai’s message to foreigners to visit Malaysia and participate in the Malaysia My Second Home (MM2H) programme.

“Between 20% and 30% of the expected 3,000 MM2H participants this year will be from Europe,” he said in an interview here on Saturday.

Under the MM2H programme, foreigners aged 50 and above are required to deposit RM150,000 in a local bank or show proof of having an offshore income of RM10,000 a month. Those below 50 will have to deposit RM300,000.

A year later, they need to maintain RM60,000 in their accounts and withdraw the remainder of the money.

Those taking up the MM2H programme can also buy houses costing RM250,000 and above without having to apply for approval from the Foreign Investment committee (FIC).

They are eligible to buy a duty free car.

The Immigration Department’s Director of the Visa, Pass and Permit Division Ab Rahim Ismail said the department received between five and 10 applications for visas every day under the MM2H programme.

“Processing takes about two months,” he said.

Ab Rahim said that successful applicants were required to come to Malaysia within six months from the date of approval.

“They must apply for an extension if they cannot meet this deadline,” he added.

One day, you might wake up to find that the new neighbour that has just moved in next door is a Japanese couple who has retired, and looking forward to a happy retirement in beautiful Malaysia.

That would be a reality if this feature article by foreign news agency Reuters is anything to go by. The new trend of wealthy Japanese retirees looking for somewhere with lower cost of living but still maintain the kind of lifestyle they have always enjoyed, is hard to ignore.

Read on, if you want to know more how this new niche market could impact you as a property investor in Southeast Asia in general and in Malaysia in particular.

Cheap S.E. Asia property lures Japanese retirees
By Viparat Jantraprap

BANGKOK, Dec 27 (Reuters) - Southeast Asian developers are targeting Japanese retirees, hoping the lure of cheap homes and health care will create a profitable new niche market.

Although Australia’s Gold Coast and Hawaii have been favoured destinations for Japanese in the past, Thailand, the Philippines and Malaysia are now promoting competing “long stay” programmes, offering foreign retirees visas and tax breaks.

Home builders are hoping today’s trickle — just one in 3,000 Japanese pensioners live abroad — becomes a steady flow because over-50s hold 75 percent of Japan’s individual wealth.

In the Philippines — which wants to attract nearly a million foreign retirees by 2015, creating 4 million related jobs — Robinson Land Corp plans to build houses for Japanese who are more used to cramped apartments.

“A government is selling the Philippines as a retirement destination, so we’re looking at building leisure retirement villas,” Robinson Land President Frederick Go said at a recent conference in Hong Kong.

“For $100,000 you can really own a palace in the Philippines.”

As well as health care, developers are laying on special activities. For example, the Philslife Orchid Hills Club, near Manila, runs a website in Japanese (www.philslife.jp), promoting pastimes including organic food cultivation, cattle rearing, ballroom dancing, stargazing and cockfighting.

In Thailand, developers LPN Development PCL, Charn Issara PCL and Quality Houses PCL are building in a thriving “little Tokyo” in central Bangkok, an area popular with the 30,000 Japanese expatriates living in Thailand.

“AFFORDABLE”

Some staff of Japanese firms, such as car makers Toyota Motor Corp. and Honda Motor Co., which have made Thailand a production hub, want to bring over retired relatives.

A Bangkok apartment is typically a third the price of the equivalent in Tokyo.

“It’s affordable,” said Rei Yamamoto, 30, who works for a Japanese software firm in Bangkok. “I decided to buy because my mother wants to spend her vacations here in the future.”

The average pension in Japan is about $1,500 a month for men and $690 for women. But in an effort to head off a crisis, Japan passed a law in 2000 to cut private-sector pension payments and raise the age at which people can receive pensions to 65 from 60.

Retired banker Kou Oikawa, 62, said elderly Japanese had a comfortable life in Thailand because of its cheap hospitals.

Thai hospitals Bangkok Dusit Medical Services and Bumrungrad Hospital are competing for “health tourism” business with the likes of Singapore’s The Raffles Medical Group and Malaysia’s KPJ Healthcare Sdn Bhd.

The average cost to an insurer for a hip replacement operation in Thailand and Singapore is US$12,000, according to medical tourism firm Planet Hospital. In Japan, costs for the procedure can mount to US$17,000.

“I feel Thais are good friends to Japanese,” Oikawa said.

Oikawa knows a baby boom after World War Two, followed by a drop in the birth rate, means millions will join him in retirement over the next decade.

Some estimates show Japan will have one person over 65 to every two of working age by 2025, a higher dependency ratio than any other major industrialised nation. Now pensioners make
up nearly a quarter of the 127 million population.

SCAMS

But high-profile scams could put many retirees off.

In December, six elderly Japanese filed a lawsuit in the Tokyo district court against a firm saying it reneged on promises to provide land for homes on the Philippine island of Cebu.

The plaintiffs, some in their seventies, said they had paid up to 9 million yen ($76,210).

But instead of dream homes with one-on-one health care, they found empty, rubbish strewn plots, according to Japanese media reports. When one tried to build a house, he found the
consultancy firm had no land titles.

One 73-year-old retiree was quoted by Kyodo news agency saying he wanted to “sound the alarm that there are some shady deals involving the retirement business”.

But Southeast Asian governments hope their incentives will be enough to win over foreign retirees. Malaysia has been at the forefront of the region’s efforts, launching in 1996 a “silver hair” scheme, now called the “Malaysia my second home” programme.

In the last four years, nearly 10,000 people have taken advantage of Malaysia’s package of a 10-year renewable multiple entry visa, tax exemption on pensions, a waiver of import and sales tax for vehicles, and permission to import domestic staff.

Developers such as MK Land Holding Bhd and Country Heights Holding Bhd could get a boost if the government goes ahead with plans to make a property purchase of at least 250,000 ringgit
($71,400) a qualification requirement.

In Thailand, LPN Development is reporting brisk sales to Japanese buyers at two of its Bangkok buildings, where a 100 square metres (1,076 square foot) sells for up to $184,700.

Property investment is exempt from the capital control measures introduced last week to halt appreciation of the baht currency.

This year’s bloodless military coup had no impact on enthusiasm for the properties, according to LPN managing director Apas Sripayak.

“The locations have led to the strong demand,” Apas said, citing the proximity of hospitals and Japanese restaurants.
($1=36.36 Baht)
($1=118.94 Yen)
(Additional reporting by Dominic Whiting in Hong Kong) - REUTERS

I guess this is great news to foreigners who has been waiting on the sidelines to enter the property market in Malaysia.

Lucrative as it seems, the government has finally opened the door to welcome foreign ownership in properties in Malaysia, where previously, the real estate has been guarded jealously.

Previously, foreign ownership of properties was introduced via the Malaysia My Second Home Programme and the owner has to stay in the property they own.

Now, with this new relaxation in rules, foreigners no longer need to be restricted in the number of properties they can own and for what purpose, provided of course, they buy properties worth above RM 250,000.

Below is the news from wires, foreign news agency Agence France Presse and local news agency, Bernama.

__________________

Malaysia relaxes foreign ownership property rules to woo investors

KUALA LUMPUR, Dec 20, 2006 (AFP) - Malaysia on Wednesday said it will allow
foreign nationals to buy residential properties worth more than 250,000 ringgit
(71,429 dollars) without approval in order to attract investors.

Under current rules, foreigners who want to invest in Malaysia’s property
market have to get approval from the government’s Economic Planning Unit for
properties valued at 250,000 ringgit and above.

“The new step is aimed at drawing foreign investors to buy residential
units in the high-end category and is expected to bring about positive changes
to the property and construction sectors,” said a statement from the prime
minister’s office.

“The increase of investments in the property sector by foreign investors
will also increase the inflow of foreign currency exchange,” it added.

Malaysia has been aggressively seeking greater foreign investment, and
Second Finance Minister Nor Mohamed Yakcop said cutting back on bureaucracy for
approvals was proof of its commitment.

“We are making it easy for them to buy high-end residential properties and
we mean it,” he was quoted as saying by the state Bernama news agency.

He said the government was cutting back on red tape to boost the flow of
foreign direct investment and revive the ailing property sector, which has been
facing a housing glut.

Nor Mohamed also said foreign investors were likely to take up properties
at the higher end of the market, at values of between 700,000 to 900,000
ringgit.

The ruling will be effective from Thursday December 21 and will not have
any conditions on the usage of the property or the limit of units to be
purchased, it said. - AFP

_________________

FOREIGNERS CAN BUY HOUSES OVER RM250,000 WITHOUT FIC’S APPROVAL

PUTRAJAYA, Dec 20 (Bernama) — Foreign nationals will be allowed to buy
residential properties worth more than RM250,000 per unit without needing
approval from the Foreign Investment Committee of the Economic Planning
Unit in the Prime Minister’s Department.

In addition, the condition of usage and the limit of units to be
purchased will not be imposed, a statement from the Prime Minister’s Office
said today.

It said the new ruling takes effect from Dec 21, 2006.

“The government always seek initiatives to reduce bureaucracy and to
generate economic growth,” it said.

The statement added that the new step is aimed at encouraging foreign
investors to buy residential units in the high-end category and is expected
to bring about positive changes to the property and construction sectors.

“Apart from that, the increase of investments in the property sector by
foreign investors will also enhance the inflow of foreign currency
exchange,” the statement added. — BERNAMA

http://www.bernama.com/bernama/v3/news_business.php?id=237550

What is the main driving force behind Malaysia’s property market? Residential properties, or in other words, houses, apartments and condominiums.

At least that was what the officials said, as what was reported by Malaysia news agency, Bernama.

Below is the full article.
______________

KUALA LUMPUR, Dec 5 (Bernama) — The Malaysian residential property

market continues to drive growth in the property market, Second Finance

Minister Tan Sri Nor Mohamed Yakcop said today.

“It accounts for almost two thirds of total volume and half of total

value of transactions of almost RM14 billion during the first half of this

year,” Nor Mohamed said.

“We have also seen increases in housing starts and planned supply,

reflecting improvements in market confidence,” he said at the “Country

Heights Innovation in Property Investment” gala night here.

Nor Mohamed said the government’s policy on housing development

programmes has always been focused on the need to ensure that Malaysians in

all income groups have access to adequate, quality and affordable homes.

Emphasis is also given on ensuring appropriate locations for housing,

particularly for low and medium cost housing, as well as the provision of

sufficient public amenities to create a conducive living environment for

home buyers and their families, he said.

The Ninth Malaysia Plan has estimated that new housing requirements

during the plan period will total more than 700,000 units.

“Of this, some 38 percent will be for the low-medium cost houses, while

the balance 62 percent for the medium and high-end homes,” Nor Mohamed

said.

The plan also envisaged that the private sector would play the lead

role in meeting the nation’s housing requirements, he said.

“The government, on its part, will continue to provide the necessary

support to facilitate the private sector to meet the target,” he added.

Nor Mohamed said the government’s efforts at improving the delivery

system in the housing sector has focused on several initiatives.

The recent introduction of the build-and-sell approach for sales of

residential units aimed to reduce the risks to house buyers of incomplete

and abandoned housing schemes, which presently, clearly placed house buyers

at a disadvantage, he said.

He also said that to further promote sales of higher end properties to

foreign purchasers in line with “Malaysia: My Second Home” programme, the

government has further relaxed home ownership rules for foreigners.

Foreign acquisitions of residential properties of more than RM250,000

per unit no longer required the approval of the Foreign Investment

Committee, he added. — BERNAMA