Category: Property Price (4)

KUALA LUMPUR, April 21 — House prices in Kuala Lumpur continue on an uptrend, posting a modest 5.1 per cent year-on-year increase, despite the weaker property market condition, says Knight Frank in its Global Residential Cities Index Report for the fourth quarter 2016.

Knight Frank Malaysia Managing Director Sarkunan Subramaniam said going forward, prices of residential properties in prominent and established areas in the city, are expected to remain resilient with moderate capital appreciation.

“Transit-oriented developments along the Light Rail Transit and Mass Rapid Transit routes are expected to gather pace with improved connectivity,” he said in the report launched here today.

Knight Frank, an independent global property consultancy, tracks the performance of mainstream house prices across 150 cities worldwide, 47 of which are from the Asia-Pacific region.

The report stated that global house prices rose by an average 6.6 per cent in 2016, its highest rate in three years, but, excluding Chinese cities, where the index would have increased by only 4.9 per cent in 2016.

Chinese cities would have occupied the entire top ten spots had New Zealand’s Wellington (23.7 per cent) not nudged Shenzhen(23.5 per cent) out of the ranking.
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HOUSING prices are expected to go up by two to three per cent with the implementation of the six per cent Goods and Services Tax (GST) on April 1 next year.
 
Residential properties are tax-exempted instead of being zero-rated, leaving developers unable to claim the six per cent as part of input tax contributed to the GST, said Malaysia Property Expo (Mapex) 2014 chairman Datuk Ng Seing Liong.
 
“The developer, as a seller, cannot claim back input tax. It has to add the tax to the cost of construction and that will increase the selling price. The Real Estate and Housing Developers’ Association (Rehda) has proposed that properties priced at less than RM400,00 to be zero-rated.
 
“Zero-rated means the developers can claim back input tax so that they don’t have to pass on the increase to house buyers,” he said, here, Monday.
 
Rehda has submitted a memorandum to the government highlighting the impact of GST on housing prices.
 
It has organised meetings with the Urban Wellbeing, Housing and Local Government Ministry to discuss ways to cushion the GST impact on house buyers, which may involve a government concession.
 
Rehda has also proposed to the government to lower the proposed six per cent GST as the tax burden on the property industry is expected to be greater.
 
“In this line of business, we provide credit facilities of 30 and 60 days, and in some cases 90 days. But under the GST, you have to pay in under 21 days. Even though you have not collected the money, you have to pay the GST,” said Ng.
 
Rehda plans to hold a series of talks for prospective home buyers next month on the effects of GST to the housing sector. 
 
Rehda is the organiser of Mapex, the country’s largest property fair.
 
It will be held at the Midvalley Exhibition Centre from October 10-12 and is expected to attract as many as 50,000 visitors this time around, with sales estimated at more than RM300 million.
 
“Last year, we hit sales of RM380 million,” Ng said.

With the coming implementation of Goods & Service Tax (GST) in April 2015, many Malaysians are concerned with what this bodes for prices in general. It is inevitable that home prices will also be affected. In this article, we explain how home and property prices will be affected moving forward.

To properly appreciate how GST will affect home prices, it is necessary to first understand how GST works. (Click here for a detailed but simple-to-understand explanation of how GST in Malaysia works).

Aside from GST, one must also have an understanding of the Sales Tax, which is the existing tax scheme affecting the property sector. GST will supplant the Sales Tax come April 2015.

Tax Scheme on Residential Property – The Similarities

In comparing both tax schemes, we have to first identify their similarities.

One similarity between GST and the existing Sales Tax scheme is that no taxes are charged or will be charged to the consumer on the purchase of a home / residential property. For GST, residential properties fall under the “Exempt Rated” basket of goods. (But do take note that GST will be charged to the consumer for commercial property purchases as commercial properties are “Standard Rated”).

However, during the creation of the final product (also known as the input stage in tax parlance), under both tax schemes, developers would incur taxes during procurement of their inputs and materials. And this is where the differences start to become apparent between both tax schemes. The tax rate for inputs and materials vary between GST and Sales Tax.

Sales Tax VS GST for Residential Properties – The Differences

Based on the Sales Tax Act of 1972, basic building materials such as bricks, cement and floor tiles fall inside First Schedule Goods, in which all the goods in this category will not be subjected to sales tax. Meanwhile, other building materials fall inside Second Schedule Goods, in which all the goods in this category will only be charged sales tax of 5%.

Under the new GST implementation, all building materials and services (E.g. Contractors, engineers) will be subject to GST with a standard rate of 6%. This will invariably raise the production cost for developers.

If you understand how GST works, you will notice that in most cases, the additional tax cost is simply passed on to the final consumer (Standard-Rated goods), or is claimed back from the government (Zero-Rated goods). But in this case (Exempt-Rated), the additional tax cost is borne by the party before the final consumer – The developer.
The developer does not have a next “victim” in the supply chain.

This seems like good news for home buyers as they do not have to pay GST when purchasing a home. However, one should not be too happy about this. It is no stretch of the imagination to think that developers would try to build in the additional tax costs into the final sale price implicitly.

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How do i price my property

Determining the price of your home is not a very difficult thing to do – It’s just tedious work. You can get professional help such as property agent or you can easily browse through the property website.

It’s tough competing with hundreds; maybe thousands of property ads in newspaper classifieds like The Star if you want to sell your home. Odds are low, chances are slim. But you need to sell your property immediately. You have some contacts – You gave them a call and say you want to sell your property – Not so immediate, but you want to get it out of your hands.

It could be even more daunting if you come across problems like active bargain hunters. What will it take for you to lower that price? Gaining real estate wealth isn’t simple – You need to be knowledgeable. The following are the 6 HEADSMACKING Tips to Pricing your Home For Sale

Consider this – You want to sell your home, but you’re in the middle of thousands of sellers. What does it take to be a smart real estate seller? Knowledge. Here they are.

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