In a bid to avoid a property bubble, the Penang government is proposing a ruling to bar those who own low to medium-cost homes from selling their properties within five or 10 years of purchase, depending on the price bracket.

Those who purchase affordable homes (RM400,000 and below on Penang island or RM250,000 and below on the Penang mainland at time of purchase) cannot sell their homes within the first five years of purchase.

Low-cost homes (up to RM42,000) and low-medium-cost homes (up to RM72,500) cannot be sold within 10 years of purchase.

If passed by the state assembly, the ruling, which is part of the 2014 state assembly budget tabled last week, will kick in on Feb 1, 2014 and will affect past and future purchases.

Penang Chief Minister Lim Guan Eng said that those who still want to sell their homes before the moratorium expires can appeal to do so to the state government.

However, if the appeal is granted, the seller can only sell his/her home to “listed buyers” - a list of buyers registered with and certified as low-income or medium-income with the state Housing Department.

“The balloting of houses will be subject to oversight by an auditing firm,” he said in a statement.

The new housing rules also stipulate the following:

  • Non-citizens can only purchase Penang properties in excess of RM1 million, while landed property on the island must cost more than RM2 million. A 3 percent levy is also charged on these purcases, with certain exemptions; and
  • All properties purchased starting Feb 1, 2014 and sold within three years will be charged a two percent levy. This excludes affordable housing.
“Preliminary discussions were held between some property players and housebuyers but the state government is prepared for further discussions with all stakeholders,” he said.

He added that the move is to ensure that genuine purchasers from the lower to middle-income groups can afford to own homes in Penang.