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New foreign property ownership threshold 'most unpopular' item in budget

Published
Modified 15 Oct 2019, 6:13 am

The government’s move to lower the floor price for foreign property ownership from RM1 million to RM600,000 for condominium units is the most unpopular item announced in Budget 2020.

This is according to Malaysiakini readers, who voted more than 14,000 times in the poll on the highlights of Budget 2020 tabled by Finance Minister Lim Guan Eng in the Dewan Rakyat last Friday.

At the time of writing, this policy was voted down 66 percent of the time, with only about a third of the voters giving it a thumbs up. The poll is still accepting votes.

In announcing the policy, Lim said the move was to reduce the supply overhang of condominiums and apartments which, in the second quarter of 2019, amounted to RM8.3 billion in value.

Lim elaborated later that the policy, which is expected to come into force next year, applies only to unsold new units that have not been able to attract local buyers.

However, critics cautioned that extending it to new launches could create competition between foreign and local buyers.

The intervention would also stop market forces from pressuring developers to lower housing unit prices to match demand, the National Home Buyers Association said.

Malaysiakini readers appeared to mostly agree with most of the other Budget 2020 announcements highlighted in the poll.

Thumbs up for free vaccination

The most popular announcement for the poll participants was the government footing the bill for pneumococcal vaccination, which costs RM325 per dose at private clinics. Two doses are required per child.

This policy garnered almost unanimous approval, with 96 percent of the 14,278 votes being a thumbs up for approval.

Another popular move was the introduction of a new tax bracket targeting those earning more than RM2 million a year.

The country’s top earners - estimated to be about 2,000 people - will have to pay 30 percent income tax, compared to the current 28 percent.

However, Malaysiakini readers were split on the upcoming Digital Services Tax, like Netflix and Spotify.

A total of 54 percent gave the tax, which will come into force on Jan 1, 2020, a thumbs up while the rest did not approve.

The tax is part of the government’s move to broaden its tax base and reduce reliance on petroleum-related revenue.

Middle-income earners ignored

Although largely popular, Malaysiakini readers were disappointed that the budget neglected certain members of the society.

One user lamented how it did not benefit middle-aged people, who are already facing difficulties.

“This budget does not benefit those aged 50 and above if they are jobless, especially married couples with children still pursuing education (who also) have to support (elderly) parents.

“Most of them are graduates with many years of experience but could not join the workforce since 99 percent of companies do not want to recruit older staff,” reader Leong noted in the comments.

It is unclear if the [email protected] programme announced by Lim on Friday applies to middle-aged graduates who are returning to work, but it is likely to target youth graduates, given the government’s focus to reduce graduate youth unemployment.

According to the policy, graduates who have been unemployed for at least one year and find employment in the year 2020 will receive RM500 a month incentive for two years, paid to their Employee Provident Fund accounts. Their employers will also receive RM300 a month incentive for the same period.

There were also some complaints from users of Malaysiakini’s Budget 2020 quiz, which allows users to find out how next year’s budget could personally benefit their own bottom lines.

Middle-income earners, particularly those in the private sector without young children, found that there were hardly any subsidies or incentives targeting their income group.

“Nothing for me. I was hoping for some reduction in tax rates.

“The government is killing the middle-income earners in its quest to help the B40.

“I am not against helping the B40 but how are you going to propel the middle income earners to high-income earners?” reader Loz commented.

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