SINGAPORE: Singaporeans seemed undeterred by the recent property tax rules announced by the Malaysian government.
More than half of the 192 indicative bookings for the latest project in Medini Iskandar -- Paradiso Nuova -- came from Singaporeans.
Its developers say they are confident that the Medini properties will be exempted from the new cooling measures but analysts note that it might be best to wait for official confirmation to avoid disappointment.
Like other developments in Medini Iskandar, the new Paradiso Nuova is likely to remain exempt from any rules regarding the capital gains tax and the minimum investment value of properties.
Zhuoyuan Iskandar, a joint venture company backed by Chinese property developer Zhuoda Group and Malaysia's Iskandar Investment Berhad, say this is the assurance given to them by the Iskandar Regional Development Authority (IRDA).
From January 1, 2014, property sold within the first three years of purchase will be subject to higher capital gains tax of 30 per cent.
This is an increase from the 15 per cent for property disposed of within the first two years under Budget 2013 and the 10 per cent for property disposed of between the third and fifth year.
In addition, foreigners can only buy properties valued at RM1 million and above.
"'Generally I think all Medini projects have been exempted, prior to all these announcements, from property tax for first buyers, and are also exempted from minimum threshold from foreign investments,” said Zhuoyan Iskandar sales and marketing director Liang Thow Ming.
“We expect this to be extended despite the new announcements. We do not think we will be affected by the (new rules). On the contrary, it will push other buyers from the other parts of Malaysia to Medini."
The developers expect confirmation from the authorities in the next one to two weeks.
IRDA has written to Malaysia's Ministry of Finance to confirm that Medini is exempted from the real property gains tax. It has also written to the Johor Land Office on the area's exemption from the minimum investment value of at least RM 1 million.
Until then, market watchers say those keen on new projects like Paradiso Nuova can only register their interest to buy, before developers obtain the Advertising Permit and Developer Licence (APDL).
“Currently buyers are registering their interest for projects that have not obtained the APDL yet,” said Johnny Chng, OrangeTee head of international projects.
“If the APDL is not obtained prior to the implementation of the new regulation, which is minimum RM1 million investment value, then all these registration of interest of deals would not be able to go through. So the registration would be treated as null.”
At an average price of RM950 per square foot, the units cost between RM600,000 and RM1.6 million. So far, most of the 192 units booked are smaller units.
Half of the bookings are from Singaporeans with another 40 per cent from Malaysians, while the rest are from other nationals who are mainly from China and Indonesia.
The 382-unit development is just a tenth of the units that the developer will be putting out.
While the current development will target Singaporeans and Malaysians, the upcoming condominium on a nearby plot of land is slated to house 700 units and will also target Chinese and Indonesian buyers.
In the next seven years, some 16 acres of land in Medini will be developed into high-end residences through a joint venture backed by Zhuoda Group and Iskandar Investment at a gross development value of RM2.6 billion.
- CNA/ec
http://www.channelnewsasia.com/news/business/medini-iskandar-property/908320.html
