Vacancy tax to imposed on developers as early as 2021

Property News/ 19 August 2020 Leave a comment

Delayed housing projects due to MCO

The Housing and Local Government Ministry (KPKT) is formulating a tax that could be imposed on developers who fail to sell their properties as early as early next year, in an effort to reduce overhang of residential units in the country.

Minister Zuraida Kamaruddin said the introduction of the tax could also induce developers to be more sensible and responsible in the projection of their projects, particularly high-rise developments.

She added that the introduction of the vacancy tax does not require Parliament’s approval as no amendment to the existing Act is needed. Once the tax is approved by the Cabinet, KPKT will look at implementing the tax as early as next year, according to the news report on Malaysia Reserve.

“When these units are left empty, it triggers a lot of problems including vandalism, which affects the quality of the house due to the defects.

“So, developers must ensure that the houses are taken up as soon as possible,” she said.
She believed the move is necessary as many housing units have taken more than one year to be filled due to various reasons, whether the developers are unable to sell or buyers fail to move in.

“So, as long as the units obtain the Certificate of Completion and Compliance (CCC), and yet they are unable to sell the units or the units failed to be filled, the developers will have to pay.

“In the future, they will do better projections when they develop houses, while ensuring the projects’ viability and developments that could attract buyers, and not just develop as they wish. With this preventive measure, they can plan better,” she noted.

Last week, Deputy Federal Territories Minister Datuk Seri Edmund Santhara Kumar told Parliament that Putrajaya will study the suggestion to introduce a vacancy tax to be imposed on properties that are unoccupied or unsold for a specified time.

This is similar to the model practiced in developed countries such as Canada and Australia.

Source: EdgeProp.my


  1. Finally
    August 19th, 2020 at 21:37 | #1

    Whoa!! Finally! A big thumbs up to our new federal gov!! However, please make sure execution and enforcement is done flawlessly ok! We all know how developers in Msia are so good at circumventing rules. You come up with vacancy tax, they find a way to transfer unsold units to another company to make it look like they are sold. So make sure the rules are comprehensive with super heavy penalty if found to be playing tricks. So, let’s wait and see.

  2. Manan
    August 21st, 2020 at 00:18 | #2

    Good one, let’s enforce it correctly…it’s very sore to see buildings after buildings in replacement of trees, and worst still to notice large number of those being unoccupied. This sort of thing is a huge disservice to the environment and sometimes we pay back by sufferings thru mismanaged flood mitigation programs.

  3. Goppal Balan
    August 21st, 2020 at 13:42 | #3

    Hahaha, the first state to die is JB and its Iskandar…

  4. Finally
    August 22nd, 2020 at 10:01 | #4

    @Goppal Balan
    I believe this law is not retrospective, so it won’t apply to whatever has been built. But moving forward, developers will have to think 3 times before launching new projects.

  5. goodmove
    August 25th, 2020 at 12:06 | #5

    finally a good move from the government to curb overzealous speculation and unethical developers, I hope the property market will be less volatile in the future, this should balance the supply-demand equation.

  6. Goppal Balan
    August 25th, 2020 at 16:49 | #6


    That’s what I meant. All the Iskandar’s so-called ambitious large scale planned China-made ghost cities will become slowed down, some may be cancelled also. Unless the China developers build them and bulk-buy them.

  7. Finally
    August 26th, 2020 at 12:27 | #7

    @Goppal Balan
    Well, if there is no actual demand and developers keep building, “someone” (either developer or buyer, depending on the timing) will die anyway, with or without Vacancy Tax. But with Vacancy Tax, the risk will shift to more towards the developers (and rightly so), resulting in more careful planning by the developers. More laws can be introduced to eliminate unfair and predatory sales tactics by developers (eg. using real estate agents to sell new projects knowing that with high sales commission, agents will lie their way through to close deals while the developers take no responsibiities). In the end, the bottom line is, building unwanted properties for speculation is a waste of resources (financial, human, material), which could otherwise be channelled to somewhere else more productive.

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