News: REHDA Wants Govt To Review Charges On Developers

Sep 26, 2019

The Real Estate & Housing Developers’ Association (REHDA) called on the government to abolish or lower unnecessary charges and requirements on developers to reduce the cost of doing business.

“By being able to reduce the cost of doing business, the savings can be passed on to house buyers in the form of more affordable housings,” said REHDA president Datuk Ir Soam Heng Choon when sharing the association’s wishlist for the upcoming Budget 2020.

He revealed that developers have been witnessing a significant hike in the cost of doing business, especially in consultancy services and construction materials, which are five to 10 percent higher, reported Bernama.

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The requirements that developers need to comply include stamp duty, land conversion premium and capital contribution charge (for utility and infrastructure), in which some plots of land have to be surrendered for plants and machinery construction.

REHDA believes that capital contribution charges should not be imposed by utility companies such as Indah Water Konsortium Sdn Bhd (IWK), Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Telekom Malaysia Bhd (TM) and Tenaga Nasional Bhd (TNB) since developers are already mandated to lay infrastructure at development projects. Moreover, the developers provide these utility companies with new customers whenever they have new developments.

Soam said the three percent gross construction cost deposited to the Housing Development Account for every phase of the project should also be reduced to one percent or allow the withdrawal based on the development’s progress.

“The deposits have been adversely impacting the project cash flow of small, medium and bigger-sized developers alike, and the impact is felt more severely by bigger players as they undertake projects with bigger gross development value (GDV) and have many on-going projects at any particular time,” he said.

“We also urge state governments and local authorities to review some of their impositions and fees that are not adding value to development but only creating more red tapes and additional costs.”

Budget 2020 is set for tabling on 11 October 2019.

 

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