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How Penjana Benefits Young Property Buyers

How Penjana Benefits Young Property Buyers, HOC

The National Economic Recovery Plan (PENJANA) is said to be good news for young, middle-income prospective homebuyers into realising their dream to own a property. Here at LBS Bina Group Berhad (LBS), we welcome the government’s measures to stimulate the property sectors through the incentives announced by the Prime Minister, Tan Sri Muhyiddin Yassin on 5 June 2020.

LBS Group Managing Director, Tan Sri Lim Hock San, believes that these incentives can spur the property market during this pandemic. As to support this measure, LBS will be unveiling additional incentive package through the LBS #DudukRumah Deals to help Malaysians own a home.

According to Scott International (Malaysia) chairman, Datuk Sr Lau Wai Seang, given these trying times, with various uncertainties and economic challenges, where there are many layoffs and pay adjustments, many potential purchasers very probably will defer their plan to own a house.

Buying a property is a big commitment, and for first time buyers, hunting for a dream house is an experience the buyer is not likely to forget. The entire process could be intimidating when not equipped with the right knowledge, and you might overlook certain critical elements in calculating the total expenditure of acquiring your home.

Proper research is required when one is about to purchase a property, and with the announcement of these PENJANA incentives, property buying activities is expected to heighten in the next few months and help stimulate the Malaysian economy. So, what were the incentives announced? Let us briefly go through it one by one.

From 1 June 2020 to 31 May 2021, the Home Ownership Campaign 2020 (HOC) is to be reintroduced. Buyers will be granted stamp duty exemption on the instruments of transfer and loan agreement for the purchase of residential homes priced between MYR300,000 to MYR2.5 million, subject to at least 10% discounts provided by the developer.

For buyers, it is important to note that you can get these exemptions only if the property is registered with REHDA Malaysia (for Peninsular Malaysia), SHEDA (for Sarawak), and SHAREDA (for Sabah).

The exemption on the instrument of transfer is limited to the first MYR1 million of the home price, while full stamp duty exemption is given on loan agreement effective for sales and purchase agreements signed between the period stated above.

Under the incentive, the 70% margin of financing limit that was applicable for third residential property valued at MYR600,000 and above will also be uplifted. Which means financial institutions can now choose to approve up to 90% property loan, even if the buyer is already buying his third property. The ability to obtain loans however is subject to internal risk management and assessment of the respective financial institutions.

The incentive also caters to existing home owners who would like to sell their residential property. Between 1 June 2020 to 31 December 2021, any gains arising from the disposal will be exempted from RPGT, and it is applicable up to three properties for each home owner. This exemption will help owners who need to liquidate due to financial woes caused by the pandemic.

For first time property buyer, the question that lingers on your mind would be if it is a good time to commit to buying a property post-MCO. If you have been looking into owning a property, if it is currently in your short-term goal, now would be the absolute best time to proceed with the idea.

Owning a property is good for you as it is an asset that increase in value over time (value appreciation) as a result of changes in inflation or interest rates. Why does appreciation matter so much? At the most basic level, it makes us feel financially secure, especially knowing that we are able to liquidate our asset in time of need.

The Home Ownership Campaign (HOC) is exceptionally beneficial and you get to save a whole lot of money from the exemptions. TA Research believes that home buyers and investors are expected to be the biggest beneficiary from PENJANA, as measures unveiled would help to reduce their entry and exit cost.

For those who have been working for a few years, this is the best time to start looking into a property. Getting one at a young age would be one of the best investments you can make, especially with the PENJANA incentive introduced, it would be highly wasteful to not make full use of it. This is the only time when bank would be lenient with their loan, and to not seize the opportunity presented would not be a smart thing to do.

We cannot stress enough on how this sort of campaign does not happen often so when it does, it is best to not miss out on it – seize the opportunity and reap the benefits for your own self.