Penang exco: State mulls lowering foreign property purchase threshold to RM800,000 for high rise properties
GEORGE TOWN, Oct 21 — Penang state exco Jagdeep Singh Deo is proposing that the foreign property purchase threshold be lowered to RM800,000 for high rise properties on the island and not the RM600,000 fixed by the federal government under Budget 2020.
The housing, local government and town and country planning committee chairman said the number of unsold properties in the state is still manageable and relatively low.
“We don't agree with the RM600,000 threshold, I suggest that we lower the threshold to RM800,000 for high rise properties on the island,” he said during a press conference this morning.
He voiced his disagreement with the federal government in lowering the threshold for the whole of 2020.
“I suggest that we only allow this for six months which will help developers to clear up their overhang even more as people will rush to buy when it is a limited time,” he said.
He added that he will bring up the RM800,000 foreign purchase threshold for high rise units on the island for a period of six months at the state exco.
“We will discuss this at the state exco and confirm this proposal,” he said.
In the recent Budget 2020 announcement, Finance Minister Lim Guan Eng said the foreign purchase threshold for high rise properties in urban areas was reduced from RM1 million to RM600,000 next year to clear up overhang of condominiums amounting to RM8.3 billion in the country.
Jagdeep said the situation is different in Penang as the threshold for foreign purchase of high rise properties in Seberang Perai on the mainland was fixed at RM500,000 by the state government.
“We will not increase it to RM600,000 according to the federal government's threshold,” he said.
He reiterated that Housing and Local Government Minister Zuraida Kamaruddin has said respective states can set their own threshold depending on the housing situation of the state.
At the moment, the threshold for foreign purchase of high rise units on the island is at RM1 million while landed properties are at RM3 million.
Jagdeep said the situation on Penang island is different as there is a gap in the prices of properties on the island.
“The existing overhang units are mostly RM800,000 and above so, in reality, there is a gap in which the developers did not build RM600,000 high rise units,” he said.
He said developers who built affordable housing of below RM300,000 each unit often sold out while there are very few RM600,000 units being sold.
“We have 3,916 overhang units in 2017 and it went down to 3,502 units in 2018 which is less compared to the overhang units in Johor, Wilayah Persekutuan and Selangor,” he said.
The lowering of the threshold for foreign buyers is only applicable for unsold completed projects and not for new launches or new projects.
He reminded developers to stop building only luxurious RM1 million houses but to focus on building affordable housing which can sell better.
“You build RM1 million houses and then you tell the ministry and me that you can't sell, this is not right, don't put all your eggs in one basket,” he said.
He told developers to focus on building affordable homes of below RM300,000 each and they would not face overhang issues.
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