Ferringhi Residence 2 at Batu Ferringhi has obtained CCC, and the units are ready to move in.

According to news reported by The Star, Mah Sing Group Bhd is targetting to launch more affordable properties in the Klang Valley and Johor with over RM3.6bil in gross development value (GDV) by the second half of this year. Given the focus is in the central region, there will be no new launches in Penang for this year.

Due to the Covid-19 pandemic and phase one of the National Recovery Plan, Mah Sing’s group chief executive officer Datuk Ho Hon Sang noted that some of Mah Sing’s property launches would be delayed.

“We are also reviewing our marketing strategy and the overall development plans for Penang, ” explained Ho, who is also Mah Sing Group’s executive director.

Having said that, the group is happy to announce that Ferringhi Residence 2 in Batu Ferringhi has obtained the certificate of compliance and completion (CCC) last December, and the units are ready for the buyers to move in.

Mah Sing Group is also targetting for its M Vista freehold condominium project in Bayan Lepas to obtain the CCC by the end of this year.

As for the central region, he pointed out that the group had over 5, 000 high-rise properties with an RM2.37bil value strategically located in Bangi, Cheras, Sentul, Rawang, and Johor Baru.

“These are affordable properties priced below RM1mil per unit. Some are priced from RM299, 000 onwards, while others from RM641, 000 to RM704, 000 per unit, ” he said.

The group also planned to launch over RM1.27bil worth of properties comprising landed houses, serviced suites and retail units from its recently acquired land bank in Sepang and Setapak.

In Bandar Baru Salak Tinggi in Sepang, Ho said, “We have a 100-acre land bank on which we plan to launch double-storey terraced houses with a GDV of RM656mil.

“We will register and launch the project in the final quarter of 2021.”

The development is surrounded by townships such as Kota Warisan, Bandar Baru Nilai, Dengkil, Putrajaya and Cyberjaya.

The project is also connected to Kuala Lumpur City Centre, Putrajaya and Cyberjaya via major highways such as the Elite Highway, North-South Expressway, Putrajaya Cyberjaya Expressway, Jalan Banting-KLIA and KLIA Extension Highway.

In Setapak, Mah Sing Group is poised to launch a mixed-development project comprising serviced suites and retail units with a GDV of RM618mil.

“We are targetting first-time home buyers and upgraders from matured neighbourhood areas such as Danau Kota, Desa Setapak, Setapak Jaya, Wangsa Maju, Taman Melati, Titiwangsa and Setiawangsa, ” he added.

Ho also noted that Mah Sing Group aimed to achieve a revenue of RM1.6bil for 2021, attributed by about 91% of properties priced below RM700, 000 per unit and 51% below RM500, 000 per unit.

“We have extended our sales momentum and achieved new property sales of approximately RM650mil in the first five months.

“This is after locking in property sales worth about RM400mil for the first quarter ended March 31, 2021.

“We are confident that our projects will continue attracting interest, primarily because of their strategic locations, affordable pricing, attractive packages and innovative designs, ” Ho added.

He also said Mah Sing would continue to maintain its healthy balance sheet with cash and bank balances and investment in short-term funds of about RM901.2mil as of March 31, 2021.

“With disciplined financial management and a healthy balance sheet, the group will continue with its selective land banking strategy for continuous growth, with Greater Kuala Lumpur and the Klang Valley being the focus areas, ” he said.

Source: TheStar.com.my

Developed by a multi-award winning developer – Hunza Properties Berhad. Mekarsari Anggun is the latest phase of Mekarsari. The “Palace-Style 11ft High Fencing*” complete with CCTV surveillance and security patrol will be the first of its kind in northern Malaysia.

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New normal, no very different liao

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The current movement control order (MCO 3.0) will not end as scheduled tomorrow (June 28).

This was announced by Prime Minister Tan Sri Muhyiddin Yassin who said the current lockdown, part of Phase 1 of the National Recovery Plan will continue until the threshold value is less than 4,000 Covid-19 cases a day.

He also said the government will announce more comprehensive assistance to all groups of society on Monday or Tuesday.

Source: NST Online

The first phase of the Swettenham Pier Cruise Terminal (SPCT) expansion project has been completed with the berthing area now bigger by about 30%.

Penang Port Commission (PPC) chairman Datuk Tan Teik Cheng said besides the solid deck wharf extended 220m towards north of the terminal, the breasting and mooring dolphin had increased by 50m and 68m.

“Phase 1A was completed on May 31 and is expected to obtain the certificate of completion and compliance (CCC) by the end of July.

“Two new link bridges will be constructed to connect the breasting and mooring dolphin.

“As a result of this extension, it will allow for the berthing of two Oasis class vessels at the same time.

“This will increase the wharf capacity to handle 12,000 passengers from the existing 8,000,” he said.

The RM155mil project is a federal initiative funded by Penang Port Sdn Bhd.

Three other phases involving preliminary upland and terminal improvement are set to be completed within the next five years.

“Phase 1B of the development in connection with the berth expansion is the narrowing of concourse and installation of gangways or boarding bridges to improve the berthing of vessels. This phase is expected to start in 2023 and be completed within a year.

“Phase 2 and 3 for terminal improvement will commence after the completion of Phase 1A and 1B.

“The proposed terminal improvement will involve the restructuring of the existing terminal to allow simultaneous flow and movement plus embarkation and disembarkation of passengers for the home porting cruise, port of call cruise and regional ferries.

“It was also proposed that the existing north side driveway be converted to two-way vehicular access linking to the apron and new annex.

“Construction is expected to start by 2024 and will take a year to complete,” he said.

Other aspects of the expansion including the refurbishment of the warehouses inside the PPC area will continue as preliminary work has already begun.

Cautious approaches on the development of the warehouses are taken due to their heritage value.

George Town World Heritage Incorporated will also be involved in the development comprising retail, culture and duty-free elements while maintaining its original heritage value.

The warehouses are set to be ready in 2022 with the development estimated to be around RM300mil.

PPSB, which was set up in 1994 under Finance Ministry Incorporated, has been operating SPCT via a management contract while PPC comes under the Transport Ministry, which is the licensing authority of the port.

Source: TheStar.com.my

Whether you’re a property investor, an owner simply looking to sell your current home to purchase your dream home or a corporate group engaging in a corporate restructuring exercise, it is important to be aware of all costs associated with a real estate transaction including the real property gains tax (RPGT) in Malaysia.

RPGT is a form of capital gains tax levied on profits arising from the disposal of real property or real property company (RPC) shares. Real property is defined to mean any land situated in Malaysia and any interest, option and other right in or over such land.

The effect of the definition of real property is that RPGT can be levied on interests or ownerships which amount to less than a full title to the land.

The RPGT Act, 1976 has been amended a number of times over the years to cater to the economic needs of the country. Currently, companies as well as individuals that are citizens or permanent residents of Malaysia will be subject to RPGT at the following rates:

• Disposal within three years – 30%,
• Disposal in the fourth year – 20%,
• Disposal in the fifth year – 15%, and
• Disposal after the fifth year – companies (10%), Malaysian citizens or permanent residents (5%). For non-citizens or non-permanent residents of Malaysia, the RPGT rate is 30% for disposals in the first five years and 10% for disposals after five years.

Based on the Short-Term Economic Recovery Plan or Penjana package announced last year, Malaysian citizens are exempted from RPGT on gains from the disposal of up to three residential properties from June 1, 2020 to Dec 31, 2021.

RPGT exemption is also available for disposals of properties by Malaysian citizens in the sixth or subsequent year after the acquisition date where the consideration does not exceed RM200, 000.

The other main exemptions from RPGT that are available for individuals are as follows:

• Exemption of RM10, 000 or 10% of the chargeable gain, whichever is greater,
• Malaysian citizens or permanent residents are given a once in a lifetime exemption for the disposal of a private residence, and
• Gifts between husband and wife, parent and child or grandparent and grandchild provided that the donor is a citizen of Malaysia. This exemption is not applicable for transfers between siblings.

Transfers of real properties between companies in the same group to bring about greater efficiency, or for purposes of reorganisation, reconstruction or amalgamation could be exempted from RPGT if certain conditions are fulfilled and the prior approval of the Director General of Inland Revenue is obtained.

For disposals of real property that take place from Oct 12, 2019, the market value of the property on Jan 1, 2013 will be deemed to be the purchase price for properties that were acquired prior to 2013.

This would give rise to a higher cost base and lower profits, thus reducing the property seller’s tax burden.

Incidental costs incurred in disposing properties can be deducted in calculating the taxable gains.

These would include fees for legal services, surveyors, sales commission etc. A common problem faced by many taxpayers is that RPGT returns are filed without taking into account incidental costs, resulting in higher RPGT payable.

Generally, Malaysia does not charge any capital gains tax (neither does Malaysia have a capital gains tax regime) on the sale of shares, the exception being profits arising from the sale of RPC shares.

An RPC company is a controlled company which holds real property or shares in another RPC where the market value of the real property or RPC shares is not less than 75% of the value of the company’s total tangible assets.

It follows then that shares in public listed companies are not regarded as RPC shares as these are not controlled companies.

The incorporation of the RPC legislation into the RPGT Act, 1976 with effect from Oct 21, 1988 was to cover a loophole that existed previously, whereby taxpayers could avoid RPGT by disposing shares in the company instead of selling the real property owned by the company.

However, under the RPC concept, the shares are deemed to be chargeable assets that are subject to RPGT.

Some interesting trivia – in a Malaysian High Court ruling, it was held that shares in a property development company would not be regarded as RPC shares since the development land held by the property developer is subject to income tax and not RPGT.

The High Court’s decision was premised on the rationale for the introduction of the RPC concept, which was to avoid the “mischief” conducted by taxpayers to avoid RPGT.

The Court of Appeal overruled the High Court’s decision, ruling that a property development company will be regarded as a RPC based on the literal interpretation of what constitutes real property under the RPGT Act, 1976, as real property includes land situated in Malaysia, notwithstanding that the development land itself is subject to income tax and not RPGT.

In a merger and acquisition exercise which involves the transfer of shares, it is important to evaluate whether the shares being transferred are RPC shares and subject to RPGT.

There is a myriad of issues to be aware of in dealing with RPGT, an interesting area of taxation law in itself.

Harvindar Singh is managing partner of Harvey & Associates. The views expressed here are his own.

Source: TheStar.com.my