Developers wish for Dibs comeback, lower RPGT rates

KUALA LUMPUR: Property developers hope the developer interest bearing scheme (Dibs) will make a comeback in Budget 2016, a controversial property financing scheme that was banned in 2014 as part of the government's cooling measures.

They also wish that the upcoming budget will include a revision of the real property gains tax (RPGT).

IJM Land Bhd managing director Edward Chong said the group wishes to see less stringent mortgage lending requirements in 2016.

“From a property industry perspective, [we welcome] measures to assist first-time homebuyers to purchase their own homes such as the introduction of first-time homeownership grant, allowing Dibs and stamp duty waiver for properties [priced at] RM500,000 and below,” he told The Edge Financial Daily via email.

Under Dibs, a developer will pay the home loan interest on behalf of house buyers during the construction period of a property.
Chong is also of the view that a reduction in corporate income tax to a more competitive level will encourage more foreign direct investments (FDI) into the country.

“The reduction of the corporate income tax to a more competitive level closer to our neighbouring countries like Singapore, Thailand and Vietnam will encourage more FDIs into Malaysia, which will help strengthen the economy, improve household income and thus, have a positive impact on the property market,” he said.

For Ivory Properties Group Bhd chief executive officer Datuk Low Eng Hock, he hopes to see a reduction of the overall RPGT rates in the upcoming budget.

The last revision to the RPGT rates was made in 2014, which saw its rates increase from ranges of  0% to 15% to 0% to 30% in an effort to curb property speculation and a sudden surge in property prices.

“We hope that the government will look into reviewing the RPGT to a lower rate or offer exemption, or suspend it like in previous years,” said Low.

As part of its wish list, S P Setia Bhd said it wants to see an increase in allocation in terms of the number of units for housing under the government housing programmes.

“An increase in incentives for developers to build more affordable housing would also help to boost the property market,” said the group.
Titijaya Land Bhd group managing director Tan Sri Lim Soon Peng said the government could also help by making housing interest cost tax deductible.

“Apart from financing assistance, incentives should also be given to further assist and encourage more home ownership,”said Lim.

The Real Estate and Housing Developers Association (Rehda), meanwhile, is proposing for the goods and services tax (GST) for residential properties priced up to RM500,000 be given relief under the GST (Relief) order.

“This is to mitigate the increased cost of affordable housing, and provide status quo opportunities to the target groups to purchase properties and own houses which are comparable with that of pre-GST regime, and similiarly to controlled price properties,” said Rehda in its Budget 2016 wishlist.