No more foreigners-only townships, Putrajaya tells developers

A view of the Forest City project which targets Chinese buyers. The government says it will no longer allow townships exclusively for foreigners.

Putrajaya said it would no longer allow developers to build townships exclusive to foreigners.

Finance Minister Lim Guan Eng said while the government does not stop foreign nationals from investing in real estate in Malaysia, solely concentrating on them would not benefit the locals.

“When a township is built exclusively for foreigners, how does that benefit Malaysia and Malaysians? ”

“Don’t build townships just for foreigners. This the government won’t accept,” he told reporters on the sidelines of the Annual Property Developers Conference: CEO Series.

Regardless of their nationality, Lim said, if foreigners were the exclusive target for housing projects, no country would accept such a situation.

“Don’t worry,” he said. “We are not preventing foreigners from buying your projects. After all, the projects are open and available to everyone, Malaysians and foreigners.”

“Foreign buyers buying property is not a problem. We welcome that because, after all, they are bringing money into Malaysia.”

He also refuted claims that the government was being hostile to foreign businesses, saying nothing could be further from the truth.

The Bagan MP said Malaysia welcomed foreign direct investment (FDI) from any country as long as it brought tangible benefits to the people and does not overburden the nation.

“We want high quality FDI flowing into the country, creating high quality jobs for the people in line with our objective of creating high quality growth shared among Malaysians.”

“We do not need mindless growth just for good GDP (gross domestic product) numbers, which has no relevance to the people and where the people do not reap any benefits.”

“What’s the use of having a 5.9% GDP growth if the people are still suffering?”

Lim said despite recording a 5.9% GDP growth last year, the previous government lost the May 9 general election as the people at large had not benefitted from that growth.

“That is why it is important for the new government to stress the economic well-being of the people. We want to make sure that when the FDI comes in, it takes into account the needs of the local people.”

“When they give business, give it to the locals. When they employ workers, they must at least employ some of the local workers. Do not employ 100% of workers imported from elsewhere,” he said.

On the topic of affordable housing, meanwhile, Lim urged developers to reduce house prices following the exemption of construction services from the 6% service tax.

“With the previous taxation system, everything was taxed, even rent. Now, we hope to see lower house prices. I hope the developers will pass on expected savings to the purchasers, in the form of reduced house prices.”

“If you don’t do that, I may need to reconsider the exemption,” he said, noting that the government was losing substantial tax revenue.

He said the government was focused on reducing the prices of residential properties, especially houses which cost less than RM400,000.

REHDA Malaysia president Soam Heng Choon said the institute was in the midst of carrying out a study to determine the quantum of savings to be made from the 6% exemption, after which it would present its findings to the finance minister.

(Source: FMT News)