The two per cent levy is among the many conditions in the new housing policies introduced in Penang’s budget 2014 to arrest escalating property prices in the state. – Picture by K.E. OoiGEORGE TOWN, Dec 18 — The two per cent levy imposed on homes sold within three years is to prevent property flipping in Penang, Chief Minister Lim Guan Eng explained today.
He said the levy, applicable only on properties purchased after the implementation of the state’s new housing policies from February 1 next year, is to stop investors from making a profit out of property “flipping” that could lead to a property bubble in the state.
“Properties bought before February 1 will not be subject to this levy but all properties bought after February 1 will be subject to it to prevent property-buyers from flipping properties in Penang,” the Air Putih state assemblyman said.
Lim advised prospective buyers against emulating two Umno leaders who he alleged had reaped huge profits of RM5 million when they flipped a piece of land within three months of buying the property.
“Datuk Musa Sheikh Fadzir and Omar Faudzar earned a 60 per cent profit in only two-and-a-half months from the sale of the land so don’t be like the Umno flippers,” he said in a press conference at his office today.
Lim was referring to the sale of the land in Kampung Terang, Balik Pulau, which the duo were accused of “flipping” for a profit early last year.
Property flipping is a term used to describe the activity of buying a house or property with the intention to sell it for a profit.
The two per cent levy is among the many conditions in the new housing policies introduced in Penang’s budget 2014 to arrest escalating property prices in the state.
Lim said the state’s Land and Mines office will take charge of administering the new housing rules, including the collection of the two per cent levy, as well as the additional three per cent levy imposed on foreign purchasers.
The Penang lawmaker said the state executive council has finalised the details of the new policy, which included the a special set of guidelines for affordable housing that will also take effect from February 1 next year.
The affordable housing policy limits buyers of properties priced below RM400,000 on the island and RM250,000 on the mainland from re-selling the properties within five years from the sales and purchase agreement.
Those who purchase affordable housing units can only sell their units to eligible buyers listed by the state housing department within five years from the purchase.
As for low- and low-medium-cost properties, all purchasers will not be allowed to sell their properties during the first 10 years of purchasing it unless through an appeal and can only be sold to eligible listed buyers.
This applies to all past and future transactions involving low cost and low medium cost properties.