Vacancy tax seen as positive move, as it inculcates housing development planning
The proposed vacancy tax slated for next year would be seen as a positive move by the government as it inculcates planning in housing development, said iProperty.com.my, a unit under REA Group Asia.
REA Group Asia customer data solutions general manager Premendran Pathmanathan said it is a matter of time before the government implements it, as there is vacancy tax in Singapore, Canada and Australia.
According to reports, a vacancy tax is a tax where any property that is left vacant and unsold for a certain amount of time is charged a penalty based on a percentage of gross selling price.
“If you look at any developing country around the world, it is a matter of time (before the government implements it) as you got vacancy tax in Singapore, and Malaysia progressing towards a developed nation, things like vacancy tax will come into place,” he said.
“If you look at it, how Singapore or other countries does it, it keeps control in terms of planning in housing development. It is a good measure, when it comes to government and developers planning for supply which is coming in. It is a measure to help curb oversupply in the future not currently,” he said.
“We’re hoping with this in place, 10 years down the road, with this vacancy tax in place, would help with the whole planning,” he told reporters after the iProperty.com.my H1 2020 Portal Demand Analytics virtual presentation on the housing industry today.
In the quest to aid mismatching in the market, Premendran reiterated that the vacancy tax is always good when it comes to planning.
“When you talk about planning, you’re talking about overhang, and oversupply, and vacancy tax is for that purpose to motivate developers to build the right quantity and to make sure all those quantities are sold at a certain period of time. In the long term, it is going to help address the whole oversupply issue,” he said.
He said housing oversupply has shifted to a downtrend in the third quarter (Q3) of 2019, as well as Q4, as opposed to growing every quarter previously.
“The home ownership campaign (HOC) (in particular) has helped a lot in reducing the overhang, still a long way to go, as in Q1 2020 there was still about 46,000 overhang units.
However, he opined that the vacancy tax is still in the planning stage, as there are a lot of clauses in it and other things that needs to be discussed, including how the government is going to implement it.