BUDGET 2018 : PEPS lauds initiatives for housing and rental market

PETALING JAYA: The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) lauds affordable housing supply, Industrialised Building System (IBS) promotion incentives and tax exemption of 50% for rental income of up to RM2,000 per month from 2018 to 2020 initiative under Budget 2018.
"In the Budget 2018, RM2.2 billion is allocated for housing of which RM1.5 billion is allocated for PRIMA housing to build 210,000 units priced at RM250,000 and below per unit over a period of two years. This is a very laudable move by the government to address the affordable housing issues in terms of financial capacity to buy and also to assist in increasing the supply of affordable homes. The step-up financing scheme provided to PRIMA is now extended to private developers under Budget 2018 is also welcome news," he said.
PEPS had highlighted the affordability issue of the middle 40% of the population (M 40) i.e. a mismatch between house prices and income levels, the lack of state land released at cheaper price for affordable housing, and high infrastructure and compliance costs, in its Budget 2018 wishlist.
As for the RM2.5 billion allocation for IBS, which is only applicable for the improvement and maintenance of dilapidated school buildings, PEPS hopes it is an initial step towards the implementation of IBS, and that IBS incentives and grants will be given to builders and housing developers who adopt the IBS.
PEPS also commended the government for promoting the growth of rental market compared to home ownership (under the concept of House Owing Democracy), PEPS is pleased to note that for rental income up to RM2,000 per month, there is a tax exemption of 50% from 2018 to 2020.
"The property industry and property market are still faced with many challenges and problems such as oversupply, overbuilding, high costs and mismatch between supply and demand and issues on end financing. It is noted that the 2018 Budget did not come with any measures or incentives to arrest the problems stated above and to tackle the revival of the property market. There was also no incentives to assist first time buyers to buy their first home," PEPS said.