Experts call for tax on vacant and unsold homes

Free Malaysia Today

a day ago

More than 22,600 completed houses remained unsold for more than nine months in 2024, according to the national property information centre.
PETALING JAYA : Housing experts have called for a vacancy tax to help tackle the rise of vacant and unsold homes and lower property prices by discouraging speculation.
They said many 'affordable' housing units are being held empty by owners or investors, making it harder for real buyers to find homes.
Research associate K Theebalakshmi said a vacancy tax can prevent speculation and push developers to build homes that meet actual needs, reducing oversupply and supporting more balanced housing development
Theebalakshmi, who is with Khazanah Research Institute, said housing prices in Malaysia rose by 5.8% a year between 2010 and 2022, well above the healthy growth range of 3% to 4%.
K Theebalakshmi.
'While some fear falling home prices or rents, this kind of market correction (vacancy tax) may be just what we need to make housing more fair and stable,' she told FMT.
'In highly urbanised states where vacancy and overhang rates are high, a vacancy tax would help stop people from holding on to homes for quick profit.'
Figures from the statistics department show that nearly 20% of homes in Selangor and Penang were vacant in 2020.
More than 53,000 units were unoccupied in Penang, often waiting to be sold or rented out. In Selangor, 343,562 homes were reported vacant, with about 197,065 of them either newly completed or pending occupancy.
As of mid-2024, there were 22,642 completed homes that remained unsold for more than nine months, according to the national property information centre. These unsold homes, also known as overhang units, were worth a total of RM14.24 billion.
Theebalakshmi noted that countries like Canada, Australia and Singapore have vacancy or higher property taxes on empty or non-owner-occupied homes, ranging from 1% to 3% of the property's value.
A 3% tax applies to homes left empty for more than six months in Vancouver, Canada, while a sliding scale is used in Melbourne, Australia, starting at 1% in the first year of vacancy and increasing in later years. In Singapore, higher property tax rates are imposed on non-owner-occupied homes.
Azree Othuman Mydin.
Azree Othuman Mydin, the dean of Universiti Sains Malaysia's housing, building and planning school, said a vacancy tax would reduce flipping and hoarding, especially for properties in the RM300,000 to RM500,000 range.
Azree also proposed raising the real property gains tax for those who sell their units too early, saying this would make quick resale less attractive and help curb flipping.
Apart from a ban on renting or leasing affordable units during the minimum tenancy period unless permitted or approved by local authorities, he suggested that buyers who leave affordable units vacant without a valid reason may be prevented from purchasing future government housing units.
'If we want housing to go to those who need it most, we must stop treating homes as trading tools,' he said.