S’poreans fleeced in Johor [Ppty Investments] yet again

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An honorable member of the Coffee Shop Has Just Posted the Following:

When will S’poreans realise that property is cheap in Johor for a gd reason? The rules are suka suka changed after S’poreans bot into the latest BS. But first some predictions:

– The infrastructure promised for Iskandar will remain that: a promise. Ask the S’porean investors who bot into the BS over the promised east coast developments near Pasir Gudang. They are still waiting, after 20 myrs. Meanwhile the BS caravan moved on to Iskandar.At first, S’poreans were sceptical, but finally succumbed to the BS, after the Arabs refused to buy into Iskandar’s tales of wealth.

Now the caravan will move further north, along the corridor for the high-speed train.

S’poreans get fleeced, and suffer in silence, the caravan moves on. ” If God didn’t want them sheared, he would not have made them sheep,” the bandit chief in the Magnificent Seven.

Malaysia’s Budget 2014 means more expensive homes for foreigners with higher taxes and a doubling of the minimum price of properties to RM1 million (S$391,000).

The most severe measure is a 30% real property gains tax (RPGT) that will be levied on gains on property disposed within three years, Disposals within four and five years are to be taxed at 20 and 15%, respectively. And at 5% in the sixth and subsequent years for non-citizens. These taxes are, it seems, higher than anticipated. Currently, the RPGT rate for property disposals within two years is 15%, while the level for disposals between two to five years is 10%. Note that Medini in the Iskandar special economic zone is now more attractive to investors as it is exempt from taxes.So if got property there, can relax until further notice: this is M’sia. In M’sia foreigners get shafted. In S’pore. locals get screwed.

Add to this the tax that the state of Johor plans to levy*, and S’poreans who bot properties in Iskandar hoping to make $ will not be too happy. Future buyers will be deterred too.

Would like to draw attention that most of Iskandar is in a DAP-controlled constituency. DAP’s heloo is one LKY.

Now these measures mean UMNO-dominated govts at the Federal and Johor will make sure voters and S’poreans repent. Hehehe.

TRE once wrote: Some issues are beginning to surface as highlighted in a recent Business Times article which said that investors are not getting assurances in black and white on issues like land zoning, mortgage loan quantums and Bumiputra employment quotas, among others.

Foreigners investing in Iskandar might do better if they can understand that most policies in Malaysia are instituted by politicians of the day. When the politician leaves, a new policy replacing the old one is to be expected. When doing business in Johor, one has to factor in such risks.

Remember that Putrajaya, the state administrative capital of Malaysia, is still struggling after more than 20 years in the making. When Iskandar was mooted in 2006, authorities were confident about getting funds from Middle Eastern investors. Obviously, that plan didn’t work out and the focus is now back to Singaporean investors.

Interesting to see the u/m projects reported by BT yesterday go ahead:

[U]nits of three local firms – Tat Hong Holdings, Boustead Singapore and CSC Holdings – have set up a joint venture with AME Group to develop land in Iskandar Malaysia.

Boustead will own 35 per cent of the joint-venture firm, named Tat Hong Industrial Properties Sdn Bhd (THIP), through its unit BP Lands, for a paid-up capital of RM3.5 million (S$1.4 million).

The Johor-based AME Group, which has a division that specialises in real estate development, will also own 35 per cent. It will do so through its unit AME Land Sdn Bhd for the same amount in paid-up capital.


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