Spacious: One of three designs offered under the Meru Hills bungalow project
in Ipoh by Para Development Sdn bhd.
THE recent proposal announced by the Government to control foreign ownership of properties may cause potential Malaysia My Second Home (MM2H) participants to shy away from Perak.
Hibiscus New Lifestyle (MM2H) Sdn Bhd managing director Gloria Choong said many were a having second thought about settling down in Perak after Prime Minister Datuk Seri Najib Tun Razak announced the proposal to increase the floor price of property ownership by foreigners from RM500,000 to RM1mil.
Choong explained that should MM2H participants be compelled to buy properties costing above RM1mil, then they would rather take their money to Kuala Lumpur or Johor Baru.
“At least in these bigger cities, it is easier to sell off the property and they are assured of higher investment returns,” she said.
Choong added that to date, the Government had not made it known if MM2H participants would be affected by the proposal announced during the tabling of Budget 2014.
“We are a bit lost as to what will happen. It also makes it hard for potential participants to decide whether or not they should move to Perak.
“Of late, Perak has been receiving more MM2H participants because they favour its low cost of living compared to the Klang Valley, Johor and Penang.
“However, I am afraid that should the proposal include those buying property under the MM2H scheme, this positive trend will most likely see a reversal,” she said.
All Seasons (MM2H) Sdn Bhd chairman Ng Fui Kong also expressed concern that the sharp increase in Real Property Gains Tax (RPGT) proposed by the Government would send a wrong signal to foreigners.
“Also, a separate rate for foreigners will not likely go down well with them. It is as if they are being discriminated against,” he said, noting that existing RPGT rates were already high.
The Government is proposing that RPGT rates be increased to 30% for gains on properties disposed of within three years and 20% and 15% respectively for disposals in the fourth and fifth year.
Malaysians will not have to pay any RPGT for property disposals from the sixth year although non-citizens have to pay 5% for disposals in the sixth and subsequent years.