PETALING JAYA: Assistance for first-time home buyers continues to top the Budget 2025 wish list for real estate players.
Key proposals include tax deductions on interest during construction and expanded rent-to-own initiatives to promote home ownership amid rising property prices.
Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Ho Hon Sang called for tax deductions on construction-period interest or a personal tax relief of about RM20,000 for properties priced up to RM500,000.
He also suggested a one-time First Time Home Buyers’ Grant of RM30,000 for the same price bracket.
“Similarly, a rent-to-own scheme should be established for first-time buyers. More banks should actively implement the Step-Up Financing Scheme to bridge affordability,” he added.
On affordable housing, Ho said the current provisions imposed on developers do not consider demand or supply in locations.
He proposed forming a task force with Rehda and relevant authorities to analyse actual housing demand, ensuring decisions are informed by accurate data regarding targeted buyers, locality, number of units and timing.
Additionally, Ho proposed that payments made to state authorities for low-cost housing construction be tax-deductible.
“Currently, developers are required to provide land for the construction of social amenities, infrastructure and open spaces, as well as make financial contributions.
“These costs will ultimately be borne by purchasers through an increase in house prices,” he said.
Ho also recommended enhancing tax incentives for consumers, developers, owners and operators involved in green building initiatives to further the environmental, social and governance (ESG) agenda.
Zerin Properties founder and group chief executive officer Previn Singhe said reintroducing the Home Ownership Campaign could be crucial in revitalising the property market.
He suggested pairing this with additional tax deductions for home loan interest and rent-to-own schemes to ease the financial burden on buyers.
For developers, he said introducing tax incentives for those focusing on properties priced below RM400,000 could also stimulate supply.
He said it is time to look beyond just financial incentives and focus on the overall ecosystem of home ownership.
“Policies addressing rising construction costs are crucial, as materials have increased by 15-20% over the last three years.
“Initiatives like rent-to-own schemes, which currently represent less than 1% of total housing transactions, should be expanded to accommodate a broader demographic, particularly in urban areas where home prices are significantly higher than the national average,” said Previn.
He also called for the government to leverage entities like government-linked investment companies to help provide affordable housing and also improve existing city assets to repurpose them into transient homes for young professionals.
Tan Kian Aun, president of the Malaysian Institute of Estate Agents, expressed hopes for stamp duty exemptions to be extended to secondary markets, such as subsale housing.
“Many new projects are built in suburban areas but there is a strong demand for property in urban areas that have already matured.
“At the same time, there are older homeowners looking to downsize and sell their larger houses with the younger generation also preferring properties in matured areas.
“With these initiatives, the younger generation may be better encouraged to pick up these properties,” he said.
Tan also advocated for the expedited introduction of the Residential Tenancy Act, which would help mediate landlord-tenant disputes.
“With the Act in place, it can also inspire better confidence among investors alongside providing guidelines for the market and real estate agents,” he said.
