PROPERTY INVESTMENT RACE HEATS UP
Govt must adopt proactive approach, says expert
THE race to attract foreign property investors to Malaysia has intensified following Thailand’s recent policy adjustments. KGV International Property Consultants executive director Samuel Tan said it is crucial for the Malaysian government to revive the economy and entice foreign investors, especially with challenging times ahead.
Thailand’s government has introduced various measures, including reductions in property registration and transfer fees, to stimulate its residential real estate market.
Tan highlighted the significance of these measures aimed at bolstering the second-largest economy in Southeast Asia.
He highlighted the significant changes, such as lowering transaction fees and tax deductions for home construction, along with revised rules on foreign ownership and lease extensions.
“The Malaysian government should adopt a proactive approach and review the less favourable policies to encourage foreign property ownership.
“One of the most glaring is the 4.0 per cent stamp duty levied on foreigners who buy Malaysian properties, which may deter investment,” he told Business Times.
He also questioned the necessity of recent policies, such as the ban on Malaysia My Second Home (MM2H) residents selling their homes for 10 years, and argued that such transactions could contribute to tax revenue.
“Many foreigners sell their properties because they are upgrading or leaving. Any such transactions will bring tax revenues to government coffers,” he added. Despite Thailand’s efforts, Tan believes Malaysia should remain attractive to investors due to its favourable legal framework, welcoming environment, security and cuisine.
CBRE | WTW managing director Tan Ka Leong believes Thailand’s new property measures will not significantly impact Malaysia’s market due to their differing advantages and appeal.
He said Malaysia remains one of the countries in Southeast Asia with favourable policies for foreign property ownership.
Foreigners can purchase both landed and stratified residential properties on a freehold basis, unlike in Thailand, where foreigners are limited to non-landed properties, subject to varying minimum prices set by different states.
Regarding taxes, Tan said Malaysia imposes a flat rate of 4.0 per cent for the transfer of property ownership and a 10 per cent real property gains tax on chargeable gains, which are comparatively attractive to foreign investors.
Additionally, the Malaysian government is reviewing its
MM2H guidelines, with expectations of introducing more investor-friendly regulations to encourage foreigners to consider Malaysia as their second home.
He expressed optimism about these developments benefiting the Malaysian property market, particularly the high-end and high-rise residential sectors.
“I welcome Malaysia’s friendly foreign ownership policy and guidelines. At the same time, I also strongly feel that Malaysia needs to have good and consistent policies and guidelines to ensure that the relaxation of any of the foreign ownership policies and guidelines won’t compromise the locals’ opportunity to own reasonably priced residential properties.
“Malaysia should have consistent policies that will bolster foreigners’ interest and confidence in the property market,” he added.