The new housing rules announced in the 2014 Penang state Budget approved at the Penang State Assembly and proposed to be effective from 1 February 2014 are designed to protect Penang from being adversely affected by a property bubble as well as ensuring that public housing and affordable housing are bought by genuine purchasers who are qualified first time buyers from lower and middle-income groups.
Public housing are low-cost houses up to RM42,000 and low-medium cost houses from RM72,500 to RM400,000 on the island and from RM72,500 to RM250,000 on the Seberang.
As a responsible government seeking sustainable economic growth and development, the Penang state government is careful to avoid the pitfalls of any property bubble that will bring hardship to the rakyat and damage the economy. Japan is a good lesson of the dangers of a property bubble. These housing rules were discussed with stakeholders especially those from the property industry who had objected to them.
The state government has set up a RM500 million Public Housing And Affordable Housing Fund to build 20,000 units of public housing and affordable housing in all 5 districts of Penang. This is the largest amount set aside by any state government in Malaysian history to build affordable and public housing. Naturally, these new rules are necessary as the state government is concerned that first-time buyers may not be given the first opportunity to buy them and reduce exploitation for speculative gain.
104 Units of Shared Ownership Scheme (SOS) & 51 Units of Rent-Buy Scheme
Further the State Government would also implement Malaysia’s first ever Shared Ownership Scheme(SOS), a historic joint purchase initiative between the state government and poor purchasers, for those who just miss out on getting a 90% or 100% bank loan, by offering a 30% interest-free loan from the state government whilst they need to borrow the remaining 70% from banks instead of a 90% or 100% bank loan. 104 units of low-cost houses in Taman Sungai Duri, Seberang Perai Selatan will be the pilot scheme for SOS. The State Government would also implement a “rent-buy scheme” of 51 units in Taman Seruling Emas Flats, Seberang Perai Selatan for the poor who are unqualified to obtain any bank loans or where banks refuse to lend any amount of loans to them.
As a people-centric government, the Penang state government wants to achieve housing democracy that allows every working family to own their own homes. Ensuring that public housing (low cost and low medium cost houses) is owned by the poor and genuine first time buyers is our priority. The state government is committed to assisting first-time buyers to have the opportunity to buy affordable homes and is willing to accept any criticism or face any legal challenges by those who oppose this commitment, whether from NGOs or BN.
The Penang state EXCO had during its last meeting refined the new housing rules for clarity and certainty 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 cannot be sold for 10 years from the date of Sale and Purchase Agreement. Those who wish to sell during the first 10 years must appeal to the state government and can only be sold to “listed buyers”. The price transacted will not be set by the state government but will be on a “willing buyer, willing seller” basis by both the “listed buyer” and the seller. 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, the first time this is done by any state government in Malaysia.
2. Affordable Housing
Affordable housing is classified as houses which were initially purchased below RM400,000 on the island and RM 250,000 on the mainland. Affordable housing purchased can not be sold for for a period of 5 years from date of Sales and Purchase Agreement. Those who wish to sell during the first 5 years must appeal to the state government and can only be sold to “listed buyers”. The price transacted will not be set by the state government but will be on a “willing buyer, willing seller” basis by both the “listed buyer” and the seller. “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 only cover all properties transacted on or after 1 February 2014. In other words it will not be retrospective but affect only Sales and Purchase Agreement signed on or after 1 February 2014.
3. Purchases By Non-Citizens
Non-citizens 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 for Sales and Purchase Agreement signed on or after 1 February 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 and intelligent city.
4. 2% Levy On Property Purchased After 1.2.2014 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 1 February 2014. In other words, this is not retrospective. Properties bought with the SPA signed before 1 February 2014 will not be subject to this levy. Only properties bought with the SPA on or after 1 February 2014 will be subject to the 2% levy if sold within 3 years. This 2% levy is not applicable to affordable housing.
Active discussions are continuing with the Bar Council, banks, property developers both in and outside Penang as well as other associations to brief them on the new housing rules which are in force for SPA signed on or after 1 February 2014 , except for low-cost or low-medium cost housing.
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