Malaysia is pro-tenant in practice

Jun 22, 2006

 Malaysian rental market practice is PRO-TENANT, even if the law is pro-landlord, the court system is inefficient and slow.

Rents: Can landlord and tenant freely agree rents in Malaysia?

With the passage of the Control of Rent (Repeal) Act of 1997, rent control was totally abolished in 2000. Although the law states that rents should be freely negotiated, rent increases can be appealed to courts if the tenant feels it is too much.

Deposits

Tenants usually pay a security deposit of two to three months’ gross rental and another ½ month of rent as utility deposit. Rent is usually paid one month in advance.

What rights do landlords and tenants have in Malaysia, especially as to duration of contract, and eviction?

Tenancy agreements usually last for a year. Renewal with a possible rent adjustment must be mutually agreed upon. A notice to vacate must be given to the tenant three months before the expiration of the contract. The landlord has the right to vacant possession of the premises from the tenant without payment of any compensation.

Tenancies are exempt from government registration. But detailed written contracts are encouraged to protect the landlord.

EVICTION FOR NON-PAYMENT OF RENT
Duration until completion of service of process	60
Duration of trial	90
Duration of enforcement	120
Total Days to Evict Tenant	270
Courts: The Lex Mundi Project

How effective is the Malaysian legal system?

Landlord and tenant issues and distress are handled by Sessions Courts. The court system is inefficient and is very costly compared to the amount to be recovered.

Even if it seems that landlords do not have a problem in evicting non-paying tenants, recovering unpaid rents is a major problem.

In 1997, a Control of Rent (Repeal) Act was passed aiming to help landlords to recover possession of the property and curb abuses by the tenants. The law has done very little to address both.

Legislation

There is no specific landlord and tenant law in Malaysia. Certain provisions of the National Land Code 1965 contain provisions on leases and tenancies. Tenancy agreements are covered by the Contract Act 1950; eviction of tenants is covered in a couple sections in the Specific Relief Act. These laws are vague and toothless, usually to the advantage of the tenant.


http://www.globalpropertyguide.com/Asia/malaysia/Landlord-and-Tenant

Measures to COOL M'sia property market may spur people to buy overseas - Henry Butcher Full article: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=162251:measures-to-cool-msia-property-market-may-spur-people-to-buy-overseas-henry-butcher&Itemid=3#ixzz2fGVuKig7 Follow us: @MsiaChronicle on Twitter

18 September 2013

STRICTER policies by the government to cool the hot property market will spur buying interest overseas, says Henry Butcher Malaysia chief.

This is because more locals would likely to channel their funds overseas and invest in properties.

"New cooling measures will only encourage people to start buying overseas, especially in London where the economy is improving. When Hong Kong and Singapore introduced cooling measures to curb speculation, people started to buy in foreign markets," Lim Eng Chong said.

He was speaking at a briefing yesterday to introduce a new project in London, called City Island, by UK developer Ballymore Group.

Maybank Investment Bank (IB) Research recently downgraded its outlook for the domestic property sector amid uncertainties posed by the cooling measures.

The research house is predicting another round of government's policy tightening to rein in household debt, despite Bank Negara Malaysia insisting that its measures initiated in July have started to work.

Maybank IB warned of further measures to cool down the property market amid concerns of a bubble, including a rise in real property gains tax and stamp duties, which is most likely to be announced in 2014 Budget.

Lim also said that the weakening of the ringgit against the US dollar will encourage Malaysians to buy properties overseas.

"We expect the pound and Australian dollar to strengthen and this will create a stimulus for people to invest in foreign properties. Investors will make more money when they buy foreign properties because of property value appreciation and forex (foreign currency) gain," he said.

The ringgit hit a fresh three-year low on August 14, loosing as much as 0.4 per cent to 3.272 per US dollar, amid broad weakness in emerging Asian currencies.

Analysts expect the local currency to weaken to 3.30 in the next six months.

BT

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Property gains tax in M’sia

September 18, 2013

Owning property can be either a liability or a great investment; either way, if you are planning to dispose of your property, you might be wondering if you will get taxed on the disposal of a property.

By Hann Liew

Owning property can be either a liability or a great investment; either way, if you are planning to dispose of your property (whether it is to cut your losses or to make a profit), you might be wondering if you will get taxed on the disposal of a property. To answer this, SaveMoney.my explains Real Property Gains Tax in Malaysia in this week’s guide.

What is Real Property Gains Tax (RPGT)?
Real Property Gains Tax is a form of tax levied by the Inland Revenue Board of Malaysia (Lembaga Hasil Dalam Negeri) on net capital gains derived from the disposal of real property (which generally means any land and/or building).

What is your net capital gain? To calculate this, you are allowed to subtract certain expenses from the gross capital gain (don’t forget to keep the bills!) such as:

• Legal fees;

• Real estate fees (i.e. sales commission) incurred to sell the property (typically between 2% – 3% of the selling price);

• Administrative fees; and

• Expenditure incurred to maintain / upgrade the property. This can include upgrade works done to the property such as renovations and interior design works.

After this point, the maximum allowable deduction here is the larger of RM10,000 or 10% of the net capital gain.

Why do we have RPGT in Malaysia?
There are many reasons why RPGT is imposed. One of the more significant reasons why the government imposes this tax is to curb property speculation, and in turn to avoid property bubbles forming. However from time to time, the government may decide to increase or decrease RPGT to suit their agenda, e.g. they could reduce RPGT to encourage investments (this actually happened for a period of time between 1 April 2007 – 31 December 2009, wherein property transactions during this period were exempted from RPGT to spur investments), which is likely to happen if the economy needs stimulation.

Another obvious reason is that RPGT is a source of revenue for the government.

When and where do you pay RPGT?
Given the nature of RPGT, i.e. it is a tax on capital gains from disposal of property, it can obviously only be paid after you have sold off the property. You are allowed a 60-day grace period, within this time you must settle the tax that you are meant to pay from your sale of property.

Your conveyancing lawyer or tax agent should be able to submit the relevant CHKTK form on your behalf and pay any dues to Lembaga Hasil Dalam Negeri (LHDN) from the proceeds of your property sale. However, it is always best to make sure, so do check with your lawyers or tax agents on this matter, rather than assuming and then getting into trouble!

Now if you are wondering just how RPGT is calculated, and how much you’ll have to pay, stay tuned for the next instalment of SaveMoney.my’s guide where we will show you just how to figure that out!

Hann Liew is the Founder and Editor-in-Chief of SaveMoney.my, an online consumer advice portal which aims to help Malaysians save money through smart (and most of the time painless) savings in their daily banking, technology, and lifestyle spending habits.

http://www.freemalaysiatoday.com/category/leisure/2013/09/18/property-gains-tax-in-msia/

WATCH OUT PROPERTY BUYERS! Govt may RAISE capital gains tax to rein in house prices

Wednesday, 28 August 2013 16:29

MARKET STABILITY: Real property gains tax may be increased to curb speculation

THE government is mulling the possibility of hiking the real property gains tax (RPGT) to rein in rising house prices and curb speculation in the market.

This, said Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan, was because the current RPGT levels had not been effective in stabilising house

prices.

“There may be a need to increase RPGT to curb unhealthy speculation in the housing market,” Rahman said after launching the 16th Malaysia Housing and Property Summit here yesterday.

RPGT was raised last year to 15 per cent from 10 per cent for properties sold within two years of purchase.

The government also raised RPGT to 10 per centfrom five percent for those sold between two and five years.

Asked whether the move would be announced in the 2014 Budget, Rahman said the decision to raise the RPGT was up to Prime Minister Datuk Seri Najib Razak.

“I wouldn’t say there will be an increase in RPGT in the upcoming budget. As far as I am concerned, we are studying the possibility and if it can cool down the market, it will be on the table.”

Market analysis has shown that the prices of houses in Kuala Lumpur and some areas in the Klang Valley, such as Mont Kiara, Hartamas and Puchong, have increased by between 15 per cent and 30 per cent in the last two years.

It is understood that the idea of raising the RPGT is to discourage people from buying and selling houses for quick profit. The RPGT is also another source of revenue for the government.

The House Price Index by the National Property Information Centre showed that in 2011 and last year, the house price index had recorded the highest increase in the last five years, especially in Selangor, Kuala Lumpur, Penang, Pahang, Sabah, Perak and Terengganu.

The government had also adopted other initiatives to allow more Malaysians, especially from the low- and middle-income groups, to own houses.

The establishment of PR1MA Corporation Malaysia (PR1MA), under the PR1MA Act 2012, was to plan, develop, construct and maintain affordable housing for middle-income households (those with a monthly household income of between RM2,500 and RM7,500).

Najib had said he was aware of the financial pressures faced by the urban middle-income population because of the country's rapid urbanisation and had made known his vision of rebalancing assistance to those in both rural and urban areas.

PR1MA is one of the initiatives to help the people manage costs of living in urban areas and is the first programme that targets the middle-income group, with homes ranging from RM100,000 to RM400,000 in a sustainable community.

PR1MA projects have been launched in many parts of the country, where house prices have spiralled beyond the means of middle-income earners.

Under the scheme, each unit is sold for between RM150,000 and RM300,000, depending on its location and size.

Each unit is between 800 and 1,400 sq feet, with three bedrooms and two bathrooms.

Applicants must be first-time buyers for the scheme.

They need to occupy the house and can obtain loans of up to 105 per cent from selected financial institutions, with a payback period of up to 30 years.

To prevent speculation, PR1MA house buyers are not allowed to sell within 10 years.

- nst.com.my

Full article: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=152331:watch-out-property-buyers-govt-may-raise-capital-gains-tax-to-rein-in-house-prices&Itemid=2#ixzz2dKMu3SIM
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Property prices in main cities to rise by 10% Full article: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=134261:property-prices-in-main-cities-to-rise-by-10&Itemid=3#ixzz2a28kkxd1 Follow us: @MsiaChronicle on Twitter

Residential property prices in the main cities are expected to climb by a steady 10 per cent this year, said PPC International Sdn Bhd chief executive Siva Shanker.

He said with the new property financing guidelines imposed by Bank Negara, he is doubtful the local property market will ever echo the phenomenal 30 to 40 per cent growth like in 2010 and 2011 and less than 20 per cent in 2012.

He said property agents welcomed Bank Negara's efforts to curb a drastic rise in property prices and growing household debt and any growth in the property sector would be slow but steady.

"There is definitely no bubble to burst in our property market," he said at a press conference by a group of real estate agents here yesterday.

Siva said the Malaysian young demographic profile is a good indicator of the healthy growth forecast in the property sector in the coming years.

"More than half of our population are aged 25 years and below, so there will be more house purchases in the years to come," he said.

On the appetite for living in non-landed properties, Siva said more Malaysians are choosing to stay in multifunctional buildings, which include office units and retail stores where they can live, work and play.

"As for landed properties, gated and guarded residential units are in great demand now. But developers would skip these properties as they are not expected to sell well in future," he said.

Asked on the overhang of the office space in the Klang Valley, he said the situation is not a major concern and the "market will correct itself".

On the outlook of the property market in Penang, another real estate agent Mark Saw said there is renewed interest and firm commitments from investors.

"With the continuing positive outlook in the economy, the Penang market will continue to attract a healthy flow of local and foreign investments," he said.

Loo Kung Hoe from Rahim & Co, who commented on the property market in Iskandar Malaysia, said contrary to market expectations, prices in Iskandar remained stable.

"The residential market will continue to grow with more launches in the second half of 2013, especially high-rise condominiums or serviced apartments since the demand is stable," he said.

He said industrial properties will be stable too due to the relocation of Singapore manufacturers to Iskandar following its limited supply of purpose-built office market.

- BT

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Land prices in Klang Valley expected to rise

July 25, 2013

SELANGOR: Land prices for prime locations in Klang Valley is expected to continue to rise, with mixed commercial and residential development being the most appealing, a property expert said yesterday.

Malaysian Institute of Estate Agents (MIEA) deputy president Erick Y T Kho said that land prices for prime locations are now asking for between RM2,000 psf and RM2,500 psf, with them becoming increasingly scarce.

“Embassies are cashing in and selling their mission’s land and moving into office buildings, he said in a presentation at the “Property Market Outlook: Post GE 13’ organised by the Malaysian Institute of Real Estate Agents in Kuala Lumpur yesterday.

Kho said that larger developers are influencing market development trends with mega projects but spill over is evident with medium/small developers mopping up pockets of land in secondary locations.

He said that with properties selling prices in city fringe projects going up to RM1,000 psf, investors are shifting interest back to the KLCC area.

He said that prices of land in many parts of greater KL are also enjoying price increases and this trend is expected to continue.

On the industrial property sector in the Klang Valley, past councilor of MIEA Maureen Cheah said that the property sector is expected to remain relatively stable in 2013 on account of prices that have reached unprecedented levels, mismatch of selling prices and valuation prices.

She said that there are signs of buyers’ resistance towards the high asking prices from owners and consumers have resorted to renting them rather than buying which will have an effect on the prices from going up much further.

On the commercial property sector, MIEA immediate past president Nixon Paul said that investments are generally more expensive in comparison to residential properties that usually attract more savvy investors.

He said that of late many smaller and newer investors are also investing in these properties by pooling their resources and making collective purchases.

http://www.freemalaysiatoday.com/category/business/2013/07/25/land-prices-in-klang-valley-expected-to-rise/

House prices to rise 10-15% this year: WTW

Thursday, 25 April 2013

KUALA LUMPUR -- Residential property prices in the country will continue to rise 10 to 15 per cent this year, according to real estate services firm C H Williams Talhar and Wong Sdn Bhd.

Managing Director Foo Gee Jen said sales for new housing developments will sustain this year driven by high demand for residential properties in the country.

"Areas of high demand will be close to the high-level infrastructure projects such as Mass Rapid Transit (MRT), Light Rail Transit (LRT) and Komuter train lines," he told reporters at the launch of the company's Property Market Report 2013 here today.

"A big volume correction will be seen this year. House prices will remain generally flat but prices could face upward pressure from rising materials prices and other cost-push factors," said Foo.

The landed residential market is expected to continue to be in resilient mood with stable growth although fewer new units may be launched, he said.

Developers are also trying to sustain profit margins by raising the new launch prices and testing new grounds for affordability.

"In tandem with that, they are putting in more eco-friendly and green building features as an added value to the projects.

"We have seen developers veering away from high-end niche developments and switching to more mid-range products in tandem with the government's PR1MA scheme," he said.

Foo said the outlook for the affordable housing segment is very positive.

"We can expect units in this segment to continue to find a ready market. High-end residential properties continue to sell well in the major cities of Johor Baharu, Kuala Lumpur, Kota Kinabalu and Penang.

"We can expect with the seemingly strong demand, prices may be pushed upwards," he added.

-Bernama

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