More alternatives with rental market initiatives
PETALING JAYA: The formulation of a Residential Rental Act and the tax exemption on rental income would facilitate the government’s push to have more alternatives in terms of providing shelter for the rakyat.
“The 50% tax exemption on rental income would encourage the T20 group to buy homes and rent them out, which would ease the overhang and oversupply of houses within the RM500,000 and RM1 million range. It would also benefit the M40 group, as it would provide more choices for the rental market,” CBRE-WTW managing director Foo Gee Jen told SunBiz.
He said this would result in a more orderly rental market and lessen the burden on the government in providing shelter as more private parties would enter the rental market.
He also said that the 50% tax exemption on rental income is more relevant than rent-to-own (RTO) schemes.
“RTO schemes may not work because not many developers have such big capital to take on such schemes. No developer would build homes with massive capital required to earn passive income,” he added.
Foo also said the Residential Rental Act would also facilitate the rental market to be more quotable for both owners and tenants.
“I hope with this Act, there will be a central registration system for tenants where landlords can do a background search on potential tenants to check on his or her track record and whether the person was a good paymaster or not.”
He said “bad” tenants could be blacklisted on the system and be compelled to settle all outstanding rent and bills before any landlord decides to lease their properties to them.
However, National House Buyers Association (HBA) secretary-general Chang Kim Loong feels the 50% tax exemption is onesided, benefiting only owners and not tenants, opining that it encourages more speculative purchases of residential properties by syndicates and investor clubs.
Chang said HBA is glad that the developer interest bearing scheme did not make a comeback. It is also heartened that there was no mention of forming a Housing Guarantee Corporation, which it sees as a licence for developers to recklessly launch new housing projects in huge volumes without considering the projects’ viability, as losses caused by abandonment would be incurred by the government.