AHEAD of the Budget 2025 announcement on 18 October 2024,urban lifestyle developer Titijaya Land Bhd (Titijaya) Managing Director Datuk Lim Poh Yit shared his wishlist for the budget initiatives that would support the real estate industry’s recovery while helping realise the goals of Ekonomi MADANI.
No property-related inheritance tax or estate tax should be imposed
Titijaya hopes the government will not impose a property-related inheritance tax or estate tax, taking into account major concerns such as the threat of capital flight and the availability of generational wealth that can be used to invest directly in the Malaysian economy, contributing to its growth.
As widely reported, inheritance taxes make up just 0.5% of overall tax revenues on average across countries in the Organisation for Economic Co-operation and Development (OECD) group of nations.
So at best, the implementation of the tax contributes a de minimis amount to the Government’s coffers.
But in the worst-case scenario, it triggers a capital exodus as asset owners relocate to countries with no estate tax.
An estate tax will also discourage property investment, as well as the establishment and expansion of businesses – key factors in generating the wealth required to purchase these assets. In the long run, this will have a negative impact on the economy and tax revenue.
Reactivate the Home Ownership Campaign (HOC)
Titijaya proposes that the government reactivate the Home Ownership Campaign (HOC), which has proven itself in not only reducing the number of overhang units but also enabling more Malaysians to own a home and experience a better quality of life.
Real estate players including Titijaya have made efforts to improve home affordability and there have been encouraging policy initiatives to improve homeownership under the MADANI administration.
However, many residential units are still considered unaffordable, and the overhang issue has not yet been resolved.
As of the first half of 2024, there are still more than 22,000 overhang residential units in the market.
In addition to helping solve the overhang problem, reactivating the HOC will also provide an additional boost for the real estate industry, which will trickle down to other major sectors of the economy, such as the construction sector.
In line with the MADANI Government’s commitment to drive economic and inclusive growth, and improve the quality of life for all Malaysians, Titijaya would like to play its part by contributing ideas to make this agenda a success.
The above “Wishlist” is proposed for the government’s consideration to be incorporated in the upcoming Budget 2025.
Titijaya hopes that the government will adopt these measures to support the Malaysian real estate industry’s recovery and ultimately assist in its growth. – Oct 15, 2024
Main image: theattiasgroup.com
