GENTING Highlands latest update

Great news for shoppers as Malaysia's second premium outlet center called Genting Premium Outlets or GPO is set to open in late 2016 May 2017 up at Genting Highlands or Resorts World Genting as it is now known. 2016 will be an amazing year for Genting as a number of new attractions are set to open all the way till 2017 where the much talked about first ever 20th Century Fox World theme park will open here as well.

Genting Premium Outlets will also be located near the Awana Resort and Golf Course, which is a little more than half way up to Resorts World Genting. A gross area of about 600,000 square feet that will house 150 designer brands and also local brand name stores will be available to suit the Southeast Asian market and there will be an allocation of 4,000 parking bays for cars and buses here.

Shoppers can expect brands like Aigner, BCBGMAXAZRIA, Burberry, Canali, Coach, Ermenegildo Zegna, Furla, Guy Laroche, Michael Kors, Polo Ralph Lauren, Salvatore Ferragamo, Swatch, Tumi and more here. At GPO, you will also find retail shops selling sportswear, fine leather, luggage, housewares, home furnishings, fashion accessories and more.

Genting Premium Outlets is located next to Awana Resort and Golf Club

The first phase of the Genting Premium Outlets will cover an estimate area of 300,000 square feet and is expected to be ready in 2016. A new food street area is also planned around the GPO and in total, the company is expecting around 4 million or more tourist a year. The second phase of the project would kick off in the next three to five years whereby another 40 brands would be included with a built up area of 80,000 square feet.

GPO will cost about RM200 million and this will be Southeast Asia’s first hilltop Premium Outlet Centre and Malaysia's second Premium Outlets Store after Johor Premium Outlets or JPO. This is also not the last as there are plans for a third Premium Outlet in the north of Malaysia in time to come.

About Genting Premium Outlets GPO

Genting Simon Sdn Bhd is a unit of Simon Genting Ltd, a 50:50 joint venture between Genting Plantations Bhd and Premium Outlets, the outlet division of Simon Property Group. The centre will be operated by GSSB, a wholly owned subsidiary of Simon Genting Ltd (SGL). GPO is also the 85th Premium Outlet Center in the Premium Outlets portfolio, development for Genting Premium Outlets is targeted for completion in the last quarter of 2016.

Genting Simon Sdn. Bhd. during the press conference

How to go to Genting Premium Outlets GPO

Genting is located about one to one and a half hours drive from Kuala Lumpur city center. There are various methods to get here and all of them are via road only. Unless you have a big wallet, you can charter a helicopter from KL to fly there in probably 15 minutes. Below are the ways to go to Genting Premium Outlets at Genting Highlands.

Car - Self driving is probable the best and easiest way to get here. From Kuala Lumpur, you need to take the MRR2 or Middle Ring Road towards the East Coast Highway or Karak Highway. The turn off to Genting is just before the main tunnel. I would strongly recommend you use Waze or GPS for first timers. One way drive time is around 60-80 minutes. 

Taxi - There are numerous taxi companies that offer KL-Genting services. One way would cost you about RM100 for 1-4 persons. Taxis include standard taxis which you can stop anywhere, executive taxis, Genting Taxis, radio call taxis and hotel taxi or limousine services. 

Taxi from KLIA and KLIA2 - There are a number of taxis that will gladly take you up to Genting Highlands, but the price will cost anywhere from RM250 to RM350 per taxi and 4 persons max. There is also a Limousine service  where prices are from RM3000 or more. Alternatively, there is the SkyVan which can seat 6-8 persons and this will cost around RM450 to RM600. 

Bus - A number of bus companies offer KL to Genting or PJ to Genting and back services. You can find most of the buses at Puduraya Bus Station near Chinatown KL, Duta Bus Terminal or in Petaling Jaya, One Utama Shopping Center Bus Terminal. The price is around RM12 one way per person and time taken is about 80-100 minutes one way. 

Cable Car - Note that most bus services stop at the main cable car station where you will continue your journey via cable car the rest of the way. A great experience for 1st timers but if you want to go all the way to the top, you need to double check with the taxi or bus company if ticket is all the way or just half way. 

Helicopter - For the well heeled, this is a quick option up there which is only 15 minutes. But special arrangements need to be done for this service in advance which can cost anywhere from RM3000 on wards. You need to contact Resorts World Genting to make this arrangement.

Overall, if you need more help on transportation to Resorts World Genting, please contact Genting Transport Reservations Centre - Tel: (603) 6251 8398 

The Genting Integrated Tourism Plan layout

In general, the new Premium Outlets at Genting would help strengthen Malaysia's position as one of the world's best tourist destinations and shopping havens as Resorts World Genting has taken a very strong initiative to cater to the tourism industry which is part of the 10 Year Genting Integrated Tourism Plan. Among the other new attractions that will open in 2016 2017 are Sky Avenue Mall Genting, Sky Plaza Shopping Mall, a new cable cay system and of course, the Genting Premium Outlets (GPO). 

source: http://blog.malaysia-asia.my/2015/11/genting-premium-outlets-gpo.html

MRTAs & MLTAs – What are they, and do you need it?

MRTAs and MLTAs are variants of life insurance products. Known as Mortgage Life Insurances, they are designed to pay off the outstanding loan balance in the event that the borrower dies or suffers from total and permanent disability (TPD) before the loan is fully paid off.

There are two types of mortgage life insurance available:

1) Mortgage Reducing/Decreasing Term Assurance (MRTA or MDTA)
2) Mortgage Level Term Assurance (MLTA)

Note: MRTT / MLTT = Takaful equivalent

Mortgage Reducing/Decreasing Term Assurance (MRTA or MDTA) / Takaful (MRTT)

MRTA or MDTA is a reducing term life insurance:

• It protects the borrower against death or TPD
• The sum assured reduces with time – Gradually decreases to nothing by the end of the tenure

The premium for this insurance is dependent on the sum assured and the tenure of coverage, as well as other factors pertinent to life insurances (E.g. Age, gender). Customers can choose the tenure and sum assured, and the premium is paid up front.

One thing to note is that MRTA/MDTA policies follow the property loan rather than the policy owner. As such, a new policy has to be taken for each new property that a person has, or whenever he refinances his loan. Some banks/insurance allow transfers of MRTA policies to another property upon request, but this is rare.

It has become common for borrowers to take up this policy along with a mortgage loan for a few reasons:

• Most convenient, as it is typically packaged as an option together with the loan
• Some lenders allow the cost of insurance to be added to your loan amount
• Some lenders offer better interest rates if a borrower signs up for a MRTA/MDTA policy with them.
• The idea behind MRTA/MDTAs is that as your loan balance decreases over time, so should the sum assured, thus saving on premiums. The premium for this type of insurance is cheaper than MLTAs

Mortgage Level Term Assurance (MLTA) / Takaful (MLTT)MLTA is closer in nature to traditional life insurance policies:

• It protects the borrower against death or TPD AND (Key difference) Optionfor 36 Critical Illnesses.
• The sum assured does not decrease with time.
• Borrowers can choose to expand their coverage to include more than death or TPD (E.g. 36 critical illnesses).
• Borrowers can choose to have a savings feature, where a portion of the premiums paid accumulate as a cash surrender value.

MLTAs are not typically packaged as an option together with the loan, but must be taken up separately with 3rd party insurance providers. Premiums are higher than MRTAs, and are paid on a monthly, quarterly, half-yearly, or yearly basis.

MLTA policies are transferable to other properties. As such, the policies can be used to insure new property loans, or when you refinance the property. Borrowers can adjust the sum assured as required without having to prove your health/age again.

This option is more commonly used by more sophisticated borrowers for short termproperty purchases.

source: http://www.starproperty.my/index.php/articles/investment/mrtas-mltas-what-are-they-and-do-i-need-it/

Mortgage Reducing Term Assurance (MRTA): Why would you need it?

If you’re taking a home loan to buy a property, chances are: you’ll be required to pay for Mortgage Reducing Term Assurance, or MRTA, by the bank as part of your loan arrangement. Some banks insist on the borrower taking out this policy, or another kind of life insurance policy, while some banks merely encourage you to do so.

If you’re one the tens of thousands of first-time home buyers out there who are wondering why you need to fork out precious Ringgit to pay for this home loan insurance, allow us to shed some light on MRTA and what it means to your home loan deal.

What Is MRTA?

MRTA is an insurance policy that settles outstanding home loan amounts in the event of death or total disablement of the borrower due to natural causes, illness or accidents. Exclusions include death due to suicide and AIDS/HIV.

Why Would You Need MRTA?

MRTA is essentially a protection mechanism for all people with home loans, especially for households with sole bread earners.

Generally, in the event of untimely death or disability of a home loan borrower (significantly if he or she is the main income earner), the greatest problem facing surviving households is their ability to pay off the remaining home loan.

In many instances, the surviving family members may even need to sell off the property at a less-than-competitive price just to pay off the outstanding amount.

By signing up for an MRTA, the MRTA will pay off part or all of the unpaid portion of a home loan, so that the surviving family members don’t have to sell off the property.

For example, if you and your husband buy a house for RM500K this year and in 10 years’ time, it’s worth RM600K but your loan still comes up to RM400K, should your husband not be able to pay the loan anymore, you could still sell the house and buy a small apartment for RM150K, or make sure you earn enough money to pay the instalments.

If you had the insurance, however, the policy would pay for whatever outstanding debt left, or part of it, so that the monthly installments are less onerous.

How Does One Apply for MRTA?

In Malaysia, MRTA is usually incorporated as part of the home loan application process. Commonly, you’ll only be required to pay a single MRTA premium. You will not need to pay a premium again throughout the entire duration of the policy.

Important Considerations for MRTA

Like any other insurance policies, MRTA has a specific insured amount as well as policy duration. The premium depends on the sum assured, interest rate, term, construction period, joint-life, and age at next birthday, among others. Discount on the premium is given for joint life application if your home is jointly owned by your spouse or next of kin.

Bear in mind that in the event of death or permanent disability, MRTA would pay off only the amount that is covered, within the time, as dictated by the policy. It does not pay for everything that the insured owes to the bank. Due to the above reason, home loan applicants are generally advised to purchase MRTA based on your specific requirements (instead of just going for the cheapest policies available).

For sole bread earners, buying maximum coverage is especially recommended despite a heftier premium, because your families are more at risk should anything happen to you. For households with multiple income earners, you may consider opting for a policy with lower coverage.

The premium can also be financed by your bank, as in bundled into your loan.

source: http://www.starproperty.my/index.php/articles/investment/mrtas-mltas-what-are-they-and-do-i-need-it/

A beginner’s guide to mortgage insurance

CHOOSING the right mortgage insurance may not be a life or death situation, but it is one important life choice. The right insurance might become the life saver for your loved ones when facing the uncertainties of life, while the wrong one will do little to alleviate a difficult financial situation.

In Malaysia, two mortgage life insurance are available to homebuyers – Mortgage Reducing Term Assurance (MRTA) and Mortgage Level Term Assurance (MLTA).

Quoting the “2013 Protection Gap in Malaysia” study, Life Insurance Association of Malaysia (Liam) president Toi See Jong said out of every 10 Malaysians, four to five persons don’t have life insurance.

Such complacency is why most Malaysians are grossly underinsured, and many are risking unsettled loan in the event of accidents or sudden deaths. Thus, transferring the burden of mortgage repayment to the loved ones.

What is the difference between MRTA and MLTA?
As property prices have skyrocketed in recent years, majority of Malaysians find themselves having to utilise the maximal loan-to-value ratio of 90% with longest loan tenure possible to reduce their equated monthly instalment (EMI).

Allianz Life chief executive officer Joseph Gross explained that MRTA and MLTA are commonly pegged to a home loan to cover the loan in the event of the death or TPD of the insured.

“The key difference is MRTA’s sum assured reduces over time while MLTA’s sum assured remains constant throughout the term of the policy,” he said.
Some home loans like flexi home loans allow one to make withdrawals but it will reduce MRTA’s sum over time. When the amount owed to the bank is higher than the MRTA’s sum, the MRTA will not be able to fully cover the home loan.

“While MLTA comes at a higher premium, the flat sum meant the borrower and the family will not have the same concern,” he added.

Mohd Adib Bin Mohd Yazid from Prudential Wealth Planner said since the bank is MRTA’s beneficiary, it is unable to protect a borrower’s family in totality.

“MLTA is more personal and often protect your next of kin. If anything happens, the family claims the insurance money. This money can be used to settle the outstanding loan amount since MLTA benefit is fixed sum assured,” he said.

Great Eastern Life Assurance (M) Bhd group agency manager Bon Sze Shean said borrowers should take note that if they decide to cancel MRTA before maturity date, the cash amount that the company will pay you is much less than the total amount premium you have paid.

He added that MLTA is a long-term financial commitment. It is not advisable to hold this plan for a short period of time in view of the high initial costs.

“If you find the fund that you have chosen is no longer appropriate, you have the flexibility to switch fund,” he added.
Bon also opined that borrowers should avoid surrendering their MLTA because if designed properly, the cash value can break even.

“Treat it as savings and use the cash value to pay off your loan (early settlement) in the later years and save on interest,” he said.

When asked if MRTAs and MLTAs are absolutely necessary, Jared Lim Loanstreetco-founder suggested that borrowers weigh their risks holistically from an estate planning perspective.

“If you are sufficiently covered by a life insurance policy, you can even consider skipping the MRTA or MLTA. But note that your beneficiaries will get lesser if you lose your ability to generate income,” Lim said.

He added that borrowers must go through the trouble of making sure their next of kin is aware of their policy and know how to make claims.

Adib said the process of insurance claim is basically the same for MRTA or MLTA. In the event of death, the claimant would need supporting documents such as certified copy of death certificate, copy of deceased identification card, burial permit, medical report, identity of claimant, proof of claimant relationship with deceased and most importantly, the original policy document.

“It is highly important to educate your family on this subject matter,” he said.

source: http://www.starproperty.my/index.php/articles/investment/a-beginners-guide-to-mortgage-insurance/

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• The Selangor government is the first in the country to control the development of serviced apartments, small office home office (Soho) and small office versatile office (Sovo), by setting conditions for the construction of affordable units, said state exco member Iskandar Abdul Samad.

He said with the new policy, developers are required to allocate between 10 to 20 percent of their construction to build affordable apartments and the percentage is based on the total number of units.

The state exco for housing, urban well-being and building management claimed that the federal government or BN state governments have no such policies.

“Why the respective governments are not brave enough to put requirements on developers to build affordable housing."

Iskandar (photo) said the affordable units are priced between RM230,000 and RM270,000, compared to Soho or Sovo units which are priced between RM450,000 and RM500,000.

“In actuality, the agreed prices are higher than that. However, the Selangor government has made it a requirement for developers to give discounts to buyers regardless of their race.

“The affordable housing units would be controlled by the Selangor Housing and Property Board. Those who want to purchase must be registered with the board.

“The developer cannot sell the units themselves. The qualification of the house buyers would be determined by household income. The quota for bumiputera would also be implemented,” he said in a statement today.

He said there are certain quarters in the media who tried to twist the facts on the new policy by claiming that the state has betrayed its people.

Iskandar said serviced apartments, Soho and Sovo are not the same as Rumah Selangorku housing.

“Rumah Selangorku are still priced between RM42,000 and RM250,000. The federal government's affordable housing costs up to RM300,000.

“Rumah Selangorku is built on land with residential status. But serviced apartments, Soho and Sovo are built on land which commercial status,” he said.

The Selangor exco said the targeted people for service apartments, Soho and Sovo are different from Rumah Selangorku.

The quit rent, property tax, water and electric tariff differs on properties built on commercial land.

source: https://www.malaysiakini.com/news/354127

Property taxes in Malaysia

Property taxes are a certainty that all property owners must face. There are taxes for every step of the way- during the purchase of property, owning of property and of course, the selling (or transferring) of property.

How many of us can say that we know exactly what taxes there are, when do they apply and how much should be paid? Perhaps property agents, lawyers or some accountants may know the complexities of taxes involved with property, but the average Malaysian will face certain frustration when the word “taxes” even comes to mind.

This simple guide aims to give property owners a better idea of what are the most common taxes, under what circumstances they apply as well as how to calculate them throughout the different stages of buying, owning to the letting go of property.

Purchasing a Property

1. Stamp Duty

During the purchase of a property, there is a ton of paper work involved, which is already quite overwhelming in itself. Stamp duty makes things a little more complicated (and costly) to purchase a property.

Stamp duty is imposed on the ‘instrument of transfer’ (or documents) related to the purchase or transfer of the property, which is paid for by the buyer. These include the Sales and Purchase Agreement (S&P) and Memorandum of Transfer (MOT), and even loan documents.

The Inland Revenue Board stipulates that the amount of stamp duty is levied upon the value of the property, determined by (whichever higher):

(i) The property’s market value.
(ii) The property’s selling price.

Example:

Property price based on market value: RM600,000
Property price based on selling price: RM550,000

So the amount that stamp duty will be levied on is RM600,000 (the higher amount of the two).

Calculating stamp duty:

Based on the example of a property valued at RM600,000:

*Note: Stamp duty is also imposed on the documents of loans taken to purchase properties. If you take a loan to purchase the property, you will have to pay 0.5% of the loan amount on top of that.

2. Goods and Services Tax (GST) - Commercial Properties

GST is a fixed 6% tax imposed on goods and services in Malaysia beginning from 1st April 2015. In terms of property purchasing, GST of 6% is applicable when you (buyer) purchase a commercial property from an individual who is GST-registered.

Criteria of commercial property owners who have to be GST-registered:

(i) Own 2 or more commercial properties.
(ii) Own land larger than 1 acre.
(iii) Own a commercial property/land valued at more than RM2 million (based on market price).
(iv) Earn more than RM500,000 (total annual taxable supply) from the commercial properties owned (eg: renting).

For instance:

The seller is a GST-registered individual whom you intend to purchase a shop lot from at a price of RM500,000. GST of 6% will then be charged to that amount (RM500,000), which you (buyer) will have to pay.

Owning a Property

After going through the daunting task of applying for a loan, purchasing the property and paying the applicable taxes, you are now the proud owner of a property! But what’s next? Well for starters, more taxes of course.

3. Cukai Taksiran/Cukai Pintu (Property Assessment Tax)

The property assessment tax, better known as Cukai Taksiran/Cukai Pintu, is a tax imposed on every household to finance the maintenance and construction efforts of various public infrastructure around the neighbourhood, town or city where the property is located.

These include the costs of cleaning and maintaining drains, road works to repair potholes, replacing broken street lamps and so on. The tax is payable to the local council of the area in which your property is based, such as Dewan Bandaraya Kuala Lumpur (DBKL), Majlis Bandaraya Petaling Jaya (MBPJ), Majlis Bandaraya Ipoh (MBI) etc..

Property assessment tax is evaluated based on the annual rental value of a property set by the state government or local authority where the property is located. Rates vary according to the type of property (eg: residence, serviced apartment, small-office-home-office, flats), location, market rate, and state of the property. (Note:Empty residential and commercial lands are also subjected to this tax.)

An example is as such (according to property assessment tax rates set by DBKL):

*Note: Property assessment tax is payable in 2 instalments, which are on February 28 or 29 for the first half of the year (January to June) and on/before August 31 for the following half of the year (July to December).

4. Cukai Tanah (Quit Rent)

This form of tax is applicable to owners of land, either freehold or leasehold and is an annual tax payable to the State Governments of each individual state. The tax also applies to homeowners of condominiums, apartments and other strata titles. The rates of quit rent may vary between respective states and even within the same state.

It is stipulated in The National Land Code that all payments of quit rent must be made on/before May 31 every year. Individual landowners can pay directly to the Department of Director General of Lands and Mines via online banking while owners of strata titles will have to make payment to the Joint Management Body (JMB) and Management Corporation (MC) of their respective residences/property. The JMB and MC will then submit the collective payment to the land office.

Calculating quit rent:

For example, a house measuring 40’ x 70’ or 2,800 sf:

Selling a Property

5. Real Property Gain Tax (RPGT)

Should you choose to sell your property within 5 years of its purchase, RPGT will be imposed on the net chargeable gains that you get from selling it. Which is the amount of profit leftover after deducting permissible costs from the gross profit, such as legal fees, property agent fees, repair costs etc.. (Note: Remember to keep all records and receipts of these deductibles.)

RPGT is only imposable should the sale or disposal of a property be profitable. If you do not turn a profit from the sale (eg: sold at same price as purchase/lower than purchase price), there is no need to pay for RPGT. Transfer of properties between married couples, a parent and his/her child, grandparents to grandchildren, where there are no gains or losses, is also exempted from RPGT. (Note: There is no exemption in transfers between siblings.)

Rates for the RPGT varies according to the number of years from which the property is disposed of or sold. There are also different rates for Malaysians and Permanent Residents of Malaysia, non-Malaysians as well as companies.

The RPGT was recently amended in the country’s 2015 Budget, whereby new rates are as follows:

Calculating RPGT:

For example, you (a Malaysian) buy a property on October 1st 2011 at a price of RM300,000. In October, 2016 you sell the same property for RM600,000. Hence, the rate that will apply to you is 15% as it is the 5th year of ownership.

*Note: Each individual is allowed a one-time only exemption from RPGT in the disposal of a residential property. This exemption is not applicable to commercial properties.

Taxing Effort Required of Property Owners

Despite how taxing it may be to go about knowing which taxes apply to your property, calculating how much tax you have to pay and even who to pay to, paying taxes is the responsibility which comes with property ownership.

Hence, owning a property takes more than just money, it also takes effort and ample knowledge. It is hoped that this simple guide can help property owners (especially first-time buyers or owners) manoeuvre the overwhelming sea of stamp duties and GST to tackling the waves of property assessment taxes and quit rent until finally, sailing smoothly pass the Real Property Gain Tax (after 5 years that is).

source: https://www.propsocial.my/topic/858/5-vip-very-important-painful-property-taxes-all-malaysians-should-know-posted-by-propsocial-editor?utm_campaign=website&utm_source=sendgrid.com&utm_medium=email

Freehold vs Leasehold

The bolded and centrally-placed words of “FREEHOLD” is commonly seen on everything from billboards and brochures to website banners promoting new developments. But why do developers think it’s so important that you know the property they are selling is freehold? Why do people scramble to get their hands on freehold properties?

Well that’s because one of the first things we learn about property is to only buy freehold. We’ve heard the same advice from others ranging from your parents to co-workers, real estate negotiators to bank officers or even read articles online about how important it is to buy freehold. With so much emphasis paced on this status, the idea that freehold tenure is an essential trait for a property worthy of our hard-earned money is truly reinforced.

Understanding Freehold and Leasehold Tenure

Freehold

In simple terms, freehold tenure is where you have the right to ownership of a property until the end of time. This means that you could pass on the property to your children or anyone else after your death and they can pass it on to their children, and then their children, followed by their children or whoever they choose and then their… you get the point.

Leasehold

Leasehold on the other hand, means that technically, you are not the owner of a property/land. You are merely leasing it for an amount of time (in Malaysia, it is commonly the maximum of 99 years when the property is new). That amount of time could also be less if you buy a pre-owned property (e.g.: 20 years ago, the tenure for a property was 99 years, when you buy it this year, you are left with 79 years).

When you reach the end of the tenure, an application to extend the lease will then have to be submitted to the state government, where if approved, you will have to pay a fee (based on the market value of that property/land at the time).

Five Common Assumptions About Freehold and Leasehold Property/Land

But is it a fact that freehold property/land are more worth buying? Or is it just a myth conjured from assumptions or optimistic ideals?

Take a look at some of the common assumptions about freehold and leasehold properties and sift out the fact from fiction.

1. You own a freehold property/land forever

Status: Denied (kind of)

Though perpetual ownership is entitled to freehold land/property owners, the fact is that ALL freehold lands/properties are subject to the Land Acquisition Act 1960, which gives the government the right to acquire them if deemed necessary (as seen in the case of land acquisition for the MRT project here).

The owner will then be compensated an amount depending on the market value of the land/property. So NO, freehold does not equal guaranteed ownership forever.

2. Freehold properties/lands are higher in value than those of leasehold

Status: Plausible

Not all leasehold properties/lands will be cheaper than freehold ones. Other factors such as location, property type, built-up area etc. will have to be taken into account. However, if 2 properties, one leasehold and the other freehold are similar in every single aspect, the leasehold one will typically be priced 20% lower than the other freehold property.

Apart from that, the price of properties are also affected by the principle of supply and demand. Hence, if freehold properties are more in demand by buyers, it is without question that their value will be higher, be it in the short or long term.

So there’s no saying that leasehold properties will definitely be cheaper than freehold ones in price.

3. Freehold property/land enjoys better appreciation over time

Status: Confirmed

Although there have been accounts evidencing that both freehold and leasehold properties/lands experience appreciation at comparable rates, this is only applicable for the first 20 to 30 years of the leasehold tenure. After that, the value of those leasehold properties/lands remain stagnant before deteriorating as the end of the tenure inches closer.

For that reason, freehold properties are a better bet if you’re looking for a property which can appreciate or remain in value over the long run.

4. Financing for freehold property/land is easier to obtain than leasehold ones

Status: Confirmed

Banks are less than willing to finance buyers who want to purchase leasehold properties, more so those with few years (even decades) left on their tenure. But if you do mange to secure a bank loan for a leasehold property, the loan amount can be significantly lower than the maximum 90% margin of financing.

5. Leasehold properties are harder to sell

Status: Confirmed

Leasehold properties, especially those which are older and are nearing the end of their tenure, are harder to sell. This is due to the fact that the renewal of the lease is uncertain, where its extension is determined solely by the local authorities. Hence, not too many buyers are keen to take the risk of buying a leasehold property and not be able to renew the lease- few potential buyers equals harder sale.

The Verdict: Buy Freehold When You Can

Given that all other aspects of property type, size, location, facilities etc. are equal, it is always better to opt for those which are freehold.

Leasehold Properties Come With Their Perks

Freehold status is a highly attractive feature for new developments. With that, developers see the need to make leasehold projects more attractive to buyers. Hence, most new developments which are leasehold will offer more value-for-money benefits in terms of facilities, design themes, finishings etc. than freehold ones.

Location is also an important factor in the property market. For instance, there are large parts of coveted locations like Bandar Sunway, (the older parts of) Petaling Jaya, Tropicana, Seputeh and even Georgetown which are leasehold.

Future Prospect: Affordability Over Freehold Status

As the price of homes become increasingly expensive, the determining factor of whether a property is worth buying may no longer weigh solely on its tenure status. This may be especially true for first-time homebuyers, where affordability is the first hurdle to tackle when buying a home.

Given the high demand for freehold properties, the supply may be limited and could even reach a point in time when buyers may not have much of a choice. By then, the factor of freehold or leasehold could even be rendered meaningless.

Conclusion

To put it simply, it is always better to buy freehold over leasehold properties (given that all other factors of locations, price, type, size etc.). In the end, it depends on individual buyers on whether it is worth compromising on freehold status for other factors like affordability and location

source:  https://www.propsocial.my/topic/900/5-common-myths-in-the-freehold-vs-leasehold-dilemma-posted-by-propsocial-editor?utm_campaign=website&utm_source=sendgrid.com&utm_medium=email