KUALA LUMPUR (REUTERS) - Malaysia's southern state of Johor, which neighbours Singapore, will impose a higher processing fee on foreigners who buy houses, state news agency Bernama reported, as it looks to boost revenues and rein in speculative buying.
Bernama quoted the state executive councillor for housing and local government, Abdul Latiff Bandi, as saying the state government will charge a fee of 4-5 percent of the property value. Proceeds will go towards welfare projects in Johor.
This compares with the current flat fee of RM10,000 (S$3,900) per property.
Singaporeans have been buying houses in Johor, especially in Iskandar, which is a 2,200 square km zone three times the size of Singapore and is just across a narrow strip of water. The strong interest also stems from cheaper property prices and utility bills compared with Singapore.
The move also comes ahead of potential new measures by the Malaysian government, such as raising the real property gains tax, in the upcoming budget on Oct 25 to rein in rising housing prices.
Property companies that have exposure to Johor include UEM Sunrise, Mah Sing Group, Tropicana Corp and Hong Kong-listed Country Garden Holdings .