Mah Sing Group Berhad’s Budget 2025 Wishlist

With increased household spending amid positive labour market conditions and larger policy support, Malaysia’s economy grew by 5.9% in the second quarter of 2024 (compared to 4.2% in Q1 2024), as stated in Bank Negara Malaysia (BNM)’s 16 August 2024 report on the economic and financial developments in Malaysia in the second quarter of 2024. According to the Valuation and Property Services Department (JPPH), there were over 104,000 property transactions recorded between January and March. This represents a 17% increase compared to the same period in 2023, with the total transaction value rising by 37% or RM56.53 billion.

With BNM maintaining the overnight policy rate (OPR) at 3% and stable employment condition, Mah Sing is optimistic about the outlook of the property sector for the year as stable OPR will bring confidence to the real estate market and investing in properties is a good hedge against inflation.

We hope the government will implement additional measures to support first-time homebuyers, streamline home-buying process and accelerate the recovery of the property industry. This is especially important considering the significant multiplier effect on more than 140 industries, which in turn will positively impact the overall economy. We hope that the government will consider the following as part of its effort to help the rakyat, stimulate the property sector and advance its vision for Malaysia Madani:

1. Reviving the Home Ownership Campaign (HOC) in helping home buyers to secure their home and promoting homeownership 

We hope that the government will implement additional measures to support first-time home buyers, specifically in home financing, to increase home ownership. Impactful measures would include:

• Revive the HOC as the incentives given under the campaign has proven to be vital in helping home buyers secure their home while reducing the housing overhang situation, such as the 100% stamp duty exemption for properties priced from RM300,001 to RM1 million.

• Offering a 10% discount on the property purchase price for first time homebuyers.

2. One-off First-Time Home Buyers’ Grant and Lower Fixed-Rate Financing

We hope that the government will introduce a one-off First-Time Home Buyers’ Grant of RM30,000 for properties priced up to RM500,000. This grant would significantly lower the financial burden on first-time buyers, especially in urban areas where property prices continue to rise. With lower and fixed-rate financing, this support would provide essential stability and predictability for young Malaysians and middle-income earners who may be concerned about rising interest rates.

3. Re-introduction of Tax Deduction for Housing Loan Interest

We hope the government will reintroduce tax deductions for housing loan interest, a policy introduced in 2009-2010. This tax relief provided significant financial support to first-time home buyers by allowing a deduction of up to RM10,000 per year on interest paid on housing loans for three consecutive years. Reintroducing this measure would provide substantial financial support to new homeowners to reducing their financial burden and encouraging more Malaysians to invest in property.

4. Reduction of Compliance Costs and Streamlining Approval Processes

We hope that the government will consider removal or reducing compliance costs and streamlining approval processes to ease the pressure on development costs and house prices for the masses. Specific measures could include reducing development charges, lowering land conversion premiums, and exempting utilities contribution charges. Simplifying regulatory processes and expediting approvals would help developer reduce project timelines and costs in making housing more affordable for the masses.

5. Incentives for Green Building and Sustainable Development

We propose enhancing tax reliefs and grants for developers who incorporate green building technologies and sustainable practices in their projects. These incentives would support Malaysia’s environmental goals, including the commitment to achieve carbon neutrality by 2050. By encouraging the adoption of eco-friendly construction methods, the government can help drive the real estate sector towards more sustainable practices and contribute positively to environmental conservation.