THE move to scrap the increase in stamp duty for properties worth more than RM1 million is a sign of confidence in the Malaysian economy, said economists.

In Budget 2017 unveiled last October, the finance minister said the stamp duty will increase from 3% to 4% effective January 1, 2018.

However, the Ministry of Finance said yesterday the stamp duty on the first RM100,000 of the property value remains at 1%.

The next RM100,001 to RM500,000 remains at 2% and for RM500,001 and above, 3%. The statement did not state a reason for the change.

MIDF Research chief economist Dr Kamaruddin Mohd Nor was reported as saying in The Edge Markets that the move will boost the property sector in 2018.

“There is an expectation of higher revenue collection by 6.1% year-on-year in 2018 amid stable economic growth,” he told The Edge Financial Daily yesterday.

Another property analyst, Lee Meng Horng, told The Edge Financial Daily the move will help the glut of high-end properties, although he said most high-end buyers will shrug off a 1% hike in stamp duty.

Last month, Bank Negara in its quarterly bulletin said the number of unsold residential properties is at a decade-high, with a majority of units being in the RM250,000 and above category.

In the first quarter of this year, unsold residential properties stood at 130,690 units, the highest in a decade. This is close to double the historical average of 72,239 units per year between 2004 and 2016, the central bank said. 

About 83% of the total unsold units were in the above RM250,000 price category. Some 61% of total unsold units were high-rise properties, out of which 89% were priced above RM250,000. 

However, Malaysia’s economic fundamentals look solid heading into 2018, with banks’ NPL (non-performing loan) ratio, gross domestic product growth and employment data holding up, Lee said.

Inflation also remains steady, easing from 3.7% in October to 3.4% in November. The economy grew 6.2% in the third quarter of 2017 on the back of strong domestic demand. – December 21, 2017.