KUALA LUMPUR, Nov 7 ― Full stamp duty exemption on both instrument of transfer and loan agreement for the first home purchase worth up to RM500,000 proposed in Budget 2021 would lower upfront cash payments and encourage home ownership among the first-timers.
Knight Frank Malaysia managing director Sarkunan Subramaniam said as this enhanced exemption is not limited to the primary market, first-time homebuyers will have wider choices to explore listings in the secondary market.
“This proposed full stamp duty waiver complements the real property gains tax (RPGT) exemption as unveiled under the country’s National Economic Recovery Plan (Penjana) in June whereby gains arising from disposing of residential property by Malaysians (limited to three units per individual) between June 1 2020 and December 31, 2021 are exempted from RPGT.
“Collectively, these incentives are expected to spur more activities in the primary and secondary residential markets, further supported by the current low interest rate environment,” he said in a statement.
Sarkunan said the current proposed exemption, which will be for longer prescribed period of five years until Decebmber 31, 2025, will also allow developers to have better product development planning to cater to market demand in the longer term.
“The stamp duty exemption for abandoned projects will encourage more white knights to complete the abandoned units and help the 4,962 homebuyers to have their dream homes after the long delay,” he added.
Sarkunan said the reduction in Employees Provident Fund (EPF) contribution and income tax rate will help increase the disposable income of individuals, especially during these trying times following the end of the six-month loan moratorium.
Meanwhile, Bernard Yap, Partner, EY Private Tax and Financial Services Leader, Ernst & Young Tax Consultants Sdn Bhd said with an additional RM150 million allocated under the SME Digitalisation Grant Scheme and the Automation Grant in Budget 2021, it is time for small and medium enterprises (SMEs) to embrace automation and digitalisation in their operations.
“SMEs should recognise that automation and digitalization are no longer a differentiator and are in fact integral ingredients to a business’ survival.
“SMEs must work closely with their key stakeholders, such as their employees, customers, suppliers and service providers, to ensure the effectiveness of digital transformation throughout their entire supply chain,” he said in a separate statement.
In Budget 2020, he said various initiatives were introduced to boost digitalization and automation in the SME sector as part of the 11th Malaysia Plan to expedite economic growth.
“However, the adoption rate was relatively low as they were viewed as optional to businesses at the time. After the Covid-19 pandemic hit Malaysia, the initiatives were further enhanced via the economic stimulus packages, namely the Prihatin and Penjana.
“As a continuation of these initiatives, Budget 2021 has also proposed various incentives and assistance for SMEs. The focus is to ensure SMEs survive this crisis and be resilient throughout the economic uncertainties affecting Malaysia,” he said.
Meanwhile, CGS-CIMB Research said the absence of a windfall tax imposed by the government in Budget 2021 would mostly benefit local glove makers, including Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd.
Instead of a windfall tax, it said these companies were noted to have committed to contribute a collective total of RM400 million to help boost the country's fight against Covid-19.
“We view this positively against a potential windfall tax as this is a one-off contribution and will not affect core earnings, whereas windfall tax would be recurring and could permanently reduce future potential earnings of glove players,” it said in a research note. ― Bernama