Penang imposes new housing rules for affordable homes from February 1

The Penang government will impose new rules for low- and low-medium cost and affordable homes that will come into effect on February 1 next year.

Chief Minister Lim Guan Eng said today that all public housing units priced up to RM42,000 (low-cost) and up to RM72,500 (low-medium cost) cannot be resold within the first 10 years after purchase.

The state government's consent must be obtained if the owner of such a unit wants to sell the house in less than 10 years.

The new buyer must be a "listed buyer" registered with the state Housing Department and certified as a low-income earner who qualifies to purchase low-cost or low-medium cost housing.

"This 10-year rule will cover all past and future purchases. The balloting of houses will be subject to scrutiny by an auditing firm," he said in a statement.

For affordable homes purchased under RM400,000 on Penang island and below RM250,000 on the mainland, owners are prohibited from selling them during the first five years unless with government consent.

The units must also be resold to "listed buyers" from the middle-income group whose names are also registered with the Housing Department.

Like the low and low-medium cost homes, the ruling covers all past and future purchases.

The state is also imposing a new ruling on foreigners buying properties. They can only buy properties in Penang in excess of RM1 million.

If they are buying landed property on the island, the value must exceed RM2 million.

All purchases of properties by non-residents will also be subjected to a 3% levy on the transacted price from February 1 next year.

However, exemptions are provided for purchases for industry purposes or for boosting employment, education, human talent or promoting Penang as an international and intelligent city.

The state is also introducing a 2% levy on property purchased from February 1 next year that are sold within three years from the date the Sales and Purchase Agreement(SPA) is signed.

"In other words, this is not retrospective. Properties bought with the SPA signed before February 1 will not be subjected to this levy. This 2% levy is also not applicable to affordable housing," Lim said.

He said preliminary discussions had been held between some property players and housebuyers but the state government is still prepared to have further discussions with all stakeholders on the new rulings.

The new housing policies were first announced on November 29 when Lim tabled the state's 2014 budget at the state legislative assembly.

When reporters asked him about them, he said the administration might become "unpopular" for imposing the new rulings.

Lim further explained in his statement today that the new rules are to protect the state from being adversely affected by the property bubble and to ensure that public and affordable housing are bought by genuine and qualified first-time buyers.

"As a responsible government seeking sustainable economic growth and development, we are careful to avoid the pitfalls of any property bubble that will bring hardship to the rakyat and damage the economy. Japan is a good lesson of the dangers of a property bubble.

"As a people-centric government, we want to achieve housing democracy that allows every working family to own their own home. Ensuring that public housing is owned by the poor and genuine first-time buyers is our priority," he said.

Lim also reminded the people of the state's pledge to build 20,000 units of public and affordable housing units in all five districts of Penang with the RM500 million Public And Affordable Housing Fund.

"This is the largest amount set aside by any state government in Malaysian history to build affordable and public housing," he said. - December 8, 2013.