PROCESSING FEE HIKE: Move will slow down investment and dampen buying sentiment, says IJM Land CEO
IMPOSING a higher tax on foreign buyers in Johor will put a dent on the property market.
IJM Land Bhd chief executive officer and managing director Datuk Soam Heng Choon said yesterday the move will slow down foreign buyers' investment participation and dampen buying sentiment.
He in the longer term, this will have an impact on 140 industries supported by real estate, although the move currently involves only Johor.
The Johor government will be hiking property processing fee from RM10,000 per transaction to four and five per cent of property value for foreign buyers.
This new measure will take place from January under a new policy being considered to boost the state's revenue.
The new fee, which will apply to all properties, including those purchased from the secondary market, will enable Johor to also control the sale of properties to foreigners.
It is estimated that there are about 130,000 foreign property owners in Johor.
"The policy will affect developers selling luxury properties and targeting the foreign market. IJM Land will not be affected as most of our projects in Johor are in the affordable range and we are targeting owner occupiers," Soam said.
Developers in Johor with high exposure to foreign buyers include UEM Sunrise Bhd, SP Setia Bhd, Sunway Bhd, Iskandar Waterfront Holdings Bhd, IGB Corp Bhd, Tebrau Teguh Bhd and Tropicana Corp Bhd.
Analysts said property developers are against proposals that will lift prices.
However, they said Johor properties will still be attractive to Singaporeans, given the current development of Iskandar Malaysia.
A spokesperson from Mah Sing Group Bhd said demand for properties in Johor should remain strong as the population base is targeted to double to three million by 2025.
He said Mah Sing will not be affected by the new fee as most of its projects in Iskandar Malaysia are predominantly townships offering bread and butter products for locals.