Penang may face lawsuits over property sale restrictions

The Penang government’s move to impose restrictions on the sale of properties in the state is illegal, said Gerakan national legal and human rights bureau head Baljit Singh.

He said the National Land Code would have to be revised first before the new regulation could be enacted.

“Penang Chief Minister Lim Guan Eng cannot just pass the ruling at the state legislative assembly level as there’s nothing in the code to allow for such a ruling,” Baljit said.

“When a property is bought in the open market, there are no restrictions unless the property is developed and subsidised by the state government,” he said in an interview yesterday.

National Gerakan Youth chief Tan Keng Liang said the state government should be prepared to face legal action if they “bulldozed” its way into implementing the rules retrospectively as the property owners would have grounds to challenge it.

“If a state government wishes to implement such rules, it must be stated clearly in the house’s land or strata title.

“I find that it is only applicable to new projects as the state can include it in the sales and purchase agreement for the new houses,” he said.

On Monday, Lim announced new housing regulations to curb property speculation, which would take effect from Feb 1 next year.

The new rules include a five-year moratorium for affordable homes bought below RM400,000 on the island and RM250,000 on the mainland, and a 10-year moratorium for low and low-medium cost housing units priced up to RM72,500.

Tan said the move to impose a 2% levy on the sale of houses above RM400,000 would further burden house buyers since it was a form of tax collected by the state.

He added that the Federal Government had already increased the Real Property Gains Tax to prevent property speculations and that the new ruling imposed by the DAP-led state government would further burden house owners.

Meanwhile, Penang Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo said as long as the seller was willing to pay the 2% levy, any property priced above RM250,000 in Seberang Prai and above RM400,000 on the island could be sold within three years.

He stressed that the new ruling only affected the properties bought with the sales and purchase agreement signed from Feb 1 next year. - By The Star

6 comments

December 11, 2013 at 11:59 PMkenD

This is mafia type of Government. Have you pay your protection money???

First collect 20 cents for each plastic bags. They force you to pay for plastic bag purpose of going green but why not voluntary practice.

Then imposed 3% levy on foreign purchase property in Penang

Again imposed RM5 levy for each room sell by the hotel to fund visit Penang 2015-2017.

Now 2% levy of the sale price from the seller who sell the property within 3 years.

levy, levy, levy, levy, levy ... die liau la...

 
December 12, 2013 at 9:26 AMHasan.M.

This new housing rules is not good to rich people, but it's good to poor people. So total agree with the Penang Government, good job!

 
December 12, 2013 at 3:05 PMmiau chu

so if I am currently staying in a LMC for 4 years and I plan to upgrade next year, how am I suppose to sell my unit and dump into the new property? I can't wait another 5 years until the rules expire then only I buy a new unit because, the price would have soared. the new rules should be applied to new projects only because this was not inside past buyer's agreement. there must be an exception for the past buyers because we bought LMC last time there's no such rules and we are getting punished. Now wanna upgrade to a better property for my family also cannot

 
December 12, 2013 at 3:24 PMkenD

@miau chu, you still can sell your LMC but only can sell to those who registered with the state gov for LC and LMC houses. Below is the new housing rules:

1. Public Housing - Low Cost and Low Medium Cost Housing
All low cost homes (up to RM42,000) and low-medium cost homes (up to RM72,500) purchased can not be sold for 10 years. Those who wish to sell during the first 10 years must appeal to the state government and can only be sold to "listed buyers". Listed buyers are those who have registered with the Housing Department of the state government and are certified as low income groups that are qualified 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 oversight by an auditing firm.

2. Affordable Housing
Affordable housing is classified as houses which were initially purchased below RM400,000 on the island and RM250,000 on the mainland. Affordable housing purchased can not be sold for 5 years. Those who wish to sell during the first 5 years must appeal to the state government and can only be sold to "listed buyers". Listed buyers are those who have registered with the Housing Department of the state government and are certified as middle-income groups that are qualified to purchase affordable housing. This 5 year rule will cover all past and future purchases. The balloting of houses will be subject to oversight by an auditing firm.

3. Purchases by Non-Citizens
Non-residents can only purchase properties in Penang in excess of RM1 million and for landed property on the island must exceed RM2 million. All purchases of properties by non-residents will be subject to a 3% levy on the transacted price from Feb 1, 2014. Exemptions are provided for purchases for industry purposes or for a purpose that promotes employment, education, human talent or promoting Penang as an international intelligent city.

4. 2% Levy on Property Purchased after Feb 1, 2014 Sold within 3 years
A 2% levy will be imposed on the seller for all property sold within 3 years from the date of the Sales & Purchase Agreement (SPA) signed from Feb 1,2014. In other words, this is not retrospective. Properties bought with the SPA signed before Feb 1,2014 will not be subject to this levy. Only properties bought with the SPA from Feb 1, 2014 will be subject to the 2% levy if sold within 3 years. This 2% levy is not applicable to affordable housing.

 
December 29, 2013 at 3:26 PMkevin

Rpgt of 30% is enough to curb property speculation.stupid n illegal.robber

 
December 30, 2013 at 12:57 PMcondomana

@kevin

Well, again, as long as you're not a flipper or short term speculator, you will not be affected by any of these at all. Whether 30% rpgt is enough or not, no one knows until the real data is out. Again, gov should not hesitate to go beyond 30% rpgt if the results are not ideal......:)....Happy Speculating!