KUALA LUMPUR, 3 Nov 2018:
Many questions remain as to how exactly checks and balances will be in place for the proposed new property crowdfunding platform to help finance cash-strapped first time home buyers.
Finance Minister Lim Guan Eng, when tabling the Budget 2019 yesterday, said: “We will be approving private-sector driven property crowdfunding platforms, which will serve as an alternative source of financing for first time home buyers.
“These exchange platforms will be regulated by the Securities Commission (SC) under the peer-to-peer financing framework.
“As an example, the buyer will be able to acquire a selected property for 20% of the price of the property, while the balance 80% will be fulfilled via potential investors who are interested to fund the acquisition in exchange for the potential appreciation in value of the property over a particular period of time.”
Such an innovative proposal still leaves many scratching their heads – who actually ends up as the home owner and will the property sale be forced at the end of the “investment” period for gains to be realised?
Or will this create a secondary trading market for the 80% ownership “interests” – which could fuel a price bubble down the road?
Lim acknowledged issues remain about such a proposal. “If successful, (this property crowdfunding platform) will transform the affordability of homes for first time home buyers in the country.
“The first exchange is expected to go live in the first quarter of 2019, after all necessary approvals are obtained from SC.”
Separately, Bernama reported Budget 2019 shows government’s commitment to help the bottom 40% (B40) household income group and 40% medium income group (M40) to own a house.
Universiti Putra Malaysia Faculty of Ecology lecturer Assoc Prof Ahmad Hariza Hashim said the government allocated nearly RM1.5 billion to build affordable homes for the two groups.
The Sales and Services Tax (SST) exemption on construction services and building materials could also help reduce house prices.
“The government as well as the Real Estate and Housing Developers Association of Malaysia (REHDA) are committed to ensure the increase in home prices is more manageable and stable.”
When tabling Budget 2019, Lim said Bank Negara would be setting up a RM1 billion fund to finance the first house purchase for those with monthly income not exceeding RM2,300.
He said the fund would be provided from 1 Jan 2019 to purchase affordable houses priced up to RM150,000.
The government is also proposing a 100% stamp duty exemption on the instrument of transfer and the loan agreement for the purchase of a first residential home priced up to RM300,000.
The effective date is for sales and purchase agreement executed from 1 Jan 2019 to 31 Dec 2020.
In the appendix to the 2019 Budget released by the Ministry of Finance, the proposal is to further encourage Malaysians to purchase the first home and to increase the purchase of unsold residential units from developers and to boost the residential property market.
The government also proposed a 100% stamp duty exemption limited to the instrument of transfer for the purchase of a first residential home priced between RM300,001 and RM1 million from any housing developer for a period of six months.
The effective date is for sales and purchase agreement executed from 1 Jan 2019 to 30 June 2019.
The government proposed a stamp duty exemption on the instrument of transfer and the loan agreement for purchase of a first residential home priced between RM300,001 and RM500,000.
The stamp duty is 100% exempted but limited to the first RM300,000 of the price of the home.
The remaining balance of the price of the home is subjected to the prevailing rate of stamp duty.
The effective date is for sales and purchase agreement executed from 1 July 2019 to 31 Dec 2020.
At present, no stamp duty exemption is granted for the purchase of a residential home priced above RM500,000.