SIBU: The federal government has been urged to review its new stamp duty policy requiring property developers to pay duty based on the value of land involved in development agreements and joint-venture arrangements.
Deputy Minister for Public Health, Housing and Local Government Datuk Michael Tiang said the policy could place a significant financial burden on property developers in Sarawak, where many developers do not own the land they develop.
Speaking at the Sarawak Housing And Real Estate Developers Association (SHEDA) Sibu Home and Property Roadshow at Wisma Sanyan here today, Tiang said the federal government had introduced a new stamp duty structure this year based on a percentage of the value of the developed land, ranging from one to four per cent depending on the land value.
He said previously, when a developer entered into a development agreement or joint-venture arrangement with a landowner to jointly develop a piece of land, the developer would normally only have to pay a flat stamp duty of RM10 for each document.
“However, under the new policy, developers are now required to pay stamp duty based on the value of the land even before they begin the actual development process.
“In some cases, they have to pay the stamp duty twice. Therefore, I would like to urge the federal government to review this policy.”
Tiang said the situation in Sarawak was different from that in Peninsular Malaysia, where developers generally purchased and owned the land before undertaking development projects.
“In Peninsular Malaysia, developers generally purchase and own the land before developing it. They are therefore the landowners, and paying stamp duty based on the value of the land is reasonable in such circumstances.
“However, most developers in Sarawak are merely property developers; they are not the landowners.”
Tiang stressed that developers who owned the land should, of course, pay the applicable stamp duty based on its value.
“But when developers enter into a joint venture with landowners, signing an agreement does not mean that the project can immediately proceed.
“They still have to obtain approval from the Sarawak State Planning Authority, and there is a long planning and approval process to go through before development can actually begin.”
He said requiring developers to pay stamp duty based on the value of the land before a development project had even become a reality could create a considerable financial burden.
“Therefore, before the development even becomes a reality, requiring developers to pay stamp duty twice based on the value of the land represents a huge financial burden for Sarawak’s property developers.
“I foresee that this will inevitably affect the progress and development of Sarawak’s property industry.”
Tiang hoped the federal government would take Sarawak’s unique circumstances into consideration when reviewing the policy.
Also speaking at SHEDA Sibu chairman Wong Siong Nee.
