“The threat of a homeless generation, where up to 80% of the population cannot afford to buy their own properties, is beginning to take root,” said HBA secretary-general Chang Kim Loong.
“The government must increase the supply of affordable homes to solve this crisis.”
Chang told FMT his association believed that affordable housing was already beyond the reach of even the middle-income group.
He said PR1MA Corp Bhd must refocus on its original objective of building affordable homes and he criticised its venture into the development of “lifestyle properties”.
Last November, PropertyGuru.com.my reported that MKH Bhd and PR1MA would go into partnership for a new mixed development project in Kajang.
In certain locations, Chang said, only 50% of the land alienated to PR1MA was being used to build affordable properties. The rest is used to build commercial and high-end properties.
He said Putrajaya could give developers more incentives to build affordable homes, such as lower land conversion premiums, alienation of land at lower prices and tax incentives.
He called for the introduction of tough measures to stop what he called the “steep rise” in property prices.
The government could do this by increasing “entry” and “exit” costs, such as the stamp duty and the real property gains tax (RPGT), he said.
He suggested flat rates in the stamp duties for a buyer’s third and subsequent property purchases – 5% of the price of the third property, 7.5% for the fourth property and 10% for the fifth subsequent properties.
He said this wouldn’t inconvenience the average genuine house buyer, who could afford only two properties in a lifetime, one to live in and the other for investment.
“It will, however, discourage property speculators.”
As for the RPGT, Chang said the current taxation structure for the first two properties should be maintained. “However, a 30% tax must be added for the third and subsequent properties if they are sold off within 10 years.”
He said properties sold off after 10 years should not be subjected to RPGT so that long-term property investors would not be punished.
Currently, profits on properties disposed off within the first three years are subject to a RPGT of 30%. Properties disposed of within four years are subject to RPGT of 20% and those sold after five years subject to 15%. No RPGT is imposed on properties sold after the sixth year of acquisition.