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All for HOC's return

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Publish date: Thu, 17 Oct 2024, 09:08 AM

KUALA LUMPUR: Will the home ownership campaign make a surprise return in the 2025 Budget on Friday?

Proponents said HOC, which offered stamp duty exemptions and relaxed loan eligibility criteria, had helped over 100,000 families achieve their dream of home ownership when it was in place from 2019 to 2021.

LBS Bina Group Bhd, Titijaya Land Bhd and Mah Sing Group Bhd are among those urging the government to reintroduce the initiative as they believe HOC will not only stimulate the real estate sector but also provide a boost to other main sectors of the economy.

The return of HOC is expected to stimulate sales in the residential property market, according to LBS Bina executive chairman Tan Sri Lim Hock San.

"LBS encourages the government to bring back the successful HOC, which was in place from 2019 to 2021. The initiative helped over 100,000 families achieve their dream of home ownership. The return of HOC is expected to stimulate sales in the residential property market, speeding up property turnover and boosting positive sentiment within the sector," he added.

Titijaya managing director Datuk Lim Poh Yit said the HOC had previously reduced the number of overhang units and increased home ownership among Malaysians.

Although there are many encouraging policy initiatives by the government together with efforts by real estate players, Lim said many residential units are still considered unaffordable.

"As of the first half of 2024, there are still more than 22,000 overhang residential units in the market. Hence, reviving the HOC will not only stimulate the real estate sector but will also provide an additional boost to other main sectors of the economy such as the construction sector.

Titijaya is against against the imposition of property-related inheritance or estate taxes, citing concerns over capital flight and reduced generational wealth investment in the Malaysian economy.

The company argued that inheritance taxes make up just 0.5 per cent of overall tax revenues on average across countries in the Organisation for Economic Co-operation and Development group of nations.

Titijaya claimed that the implementation of the estate tax may discourage property investment and business growth, potentially harming economic growth and tax revenue.

Mah Sing views the incentives given under the HoC (i.e the 100 per cent stamp duty exemption for properties priced from RM300,001 to RM1.0 million, and a 10 per cent discount for first-time homebuyers) as pivotal in assisting first-time home ownership and reduce the property overhang situation.

Mah Sing also harbours hopes that the government could introduce a one-off, first-time home buyer's grant of RM30,000 for properties priced up to RM500,000 plus lower fixed-rate financing.

Meanwhile, CIMB Securities said affordability-related issues remain a central theme for the property sector heading into the 2025 Budget, although quite a number of proposals that were put forth are not new.

The firm identified two high-impact proposals that if implemented, could reinvigorate the property sector - the HOC and Madani Deposit Scheme.

"The return of the highly-popular HOC, coupled with the right incentives, could prod a further reduction in the number of unsold properties," it said, adding that by lowering the initial financial barrier, the latter initiative would bolster the upfront affordability of first-time home buyers, especially among the B40 and M40 segments.

The Housing and Local Government reportedly is pushing for the Madani Deposit Scheme as a tool to help young people buy their first homes.

Targeting youths aged between 21 and 40, it represents one of 33 proposals forwarded by the ministry for consideration under the budget.

The maximum threshold under the Madani Deposit Scheme is RM30,000 for homes priced not more than RM500,000. 

 

https://www.nst.com.my/business/economy/2024/10/1120864/all-hocs-return

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