A home is a basic necessity but for many, acquiring one is just an unattainable goal.
For some, even renting a house is a luxury.
However, little can be done to ensure that it is within the means of every family to have a house they can call their own.
The numbers are just not in their favour. According to the National Property Information Centre, the median price of a house now is RM295,000. But data from Bank Negara Malaysia shows that the median household income is only RM5,873.
At that level of income, a family cannot afford anything that costs more than RM211,000. That puts most houses beyond their reach.
However, it is not as simple as abolishing taxes on building materials and putting a cap on land prices to make houses more affordable for the average Malaysian family.
Tan Hun Beng, chairman of the Penang chapter of the Real Estate and Housing Developers Association (Rehda), pointed out that levying taxes is a source of revenue for the government.
“If taxes are eliminated altogether, there will be nothing left for the government,” he told theSun.
“It is not unusual for taxes to be imposed on these items (building materials),” he said.
Tan agreed that taxes in Brunei and some countries in the Middle East are waived but only because they have an abundance of other resources. “The best way forward is to scale down taxes. With taxes reduced, the cost of building materials will come down. That will bring some benefits to the end-user.”
Tan pointed out that it would also be difficult for the government to determine the price of land.
“Ours is a market-driven economy and the price of land is determined by market forces,” he said. “In places where there is a higher demand for property, prices will, of course, be higher.”
For instance, he said, land along Gurney Drive in George Town, Penang costs RM1,200 to RM2,300 per square foot. In contrast, the price of land in mainland Penang may be as low as RM30 to RM40 per square foot. “And the distance between these two areas is only 50km.”
However, property developer Datuk Toh Chin Leong agreed that tax exemptions for selected items could help in bringing home ownership to a wider community.
Nonetheless, Toh told theSun, such exemption should be limited only to affordable home projects.
“This can entice developers to help meet the market demand for affordable housing,” he said.
Toh also agreed that it is difficult to put a cap on land prices. “So many factors determine the price of land, such as the zoning status, the location and the title,” he said.
Tan and Toh agreed that temporary occupational licences (TOL) could be converted into permanent tiles to make more land available for affordable housing.
A TOL is a short-term permit to occupy a piece of land for agriculture or housing. The permit has to be renewed annually or every two years, depending on the land code of each state.
Tan proposed that to accommodate the need for affordable housing, the government should first launch a survey to determine the level of affordability in each location, based on average income and land prices.
“We have to find a balance. Otherwise, there will be an over-supply. After all, affordability differs from one place to another,” he said.
On the other hand, Toh said social housing should be a responsibility of the government. “The government can use revenue from corporate taxes to finance such projects,” he added.
Source: TheSunDaily.my
