NO MORE CGT IN MALAYSIA

Malaysia is set to abandon capital gains tax on property transactions beginning on 1 April, Prime Minister Abdullah Ahmad Badawi announced last week. The measure – part of a series of government initiatives designed to stimulate the country’s currently moribund property market – will “inject more excitement and dynamism in both the property and financial sectors”, according to Abdullah.

“Potential that has gone unrealised or under-optimised will be turned into new industries and businesses, new value creation and new jobs,” he told the Thai parliament last week.

Alongside the scrapping of CGT the government has announced the creation of new incentives for the substantial Iskandar Development Region free economic zone. Businesses in six key sectors – education, financial consultancy, healthcare, logistics, tourism and “creative industry” – will be offered tax breaks if they set up within the zone before 2015. It is expected that foreign developers and agents will be quick on the uptake here, as well as in the four new free zones announced by Abdullah: the Northern Corridor Economic Region, the East Coast Corridor, the Sabah Corridor and the Sarawak Corridor – the latter two are on the island of Borneo, which has been the recipient of a new wave of foreign property development investment over the past year.

The first step – the loan application

As might be expected, the first step in obtaining an AU (automatic underwriting) is to provide a complete credit application (also called a “Fannie Mae 1003”) or “Uniform Residential Loan Application”. This is the most important document in any USD mortgage loan package.
It must be accurately and fully completed in order to be able to obtain timely loan decisions.
Application needs to disclose verifiable information, so Loan Processor will be able to confirm it
Unverifiable information, misrepresentations or omission of facts will create a cause for denial.

U.S. Home Prices Still Rising But Rate Of Appreciation Slower

Unlike the see-saw figures on housing sales and house prices that come out monthly from the National Association of Realtors and the Census Bureau, the House Price Index (HPI) published quarterly by the Office of Federal Housing Enterprise Oversight (OFHEO) takes the longer view.

The HPI for the fourth quarter of 2006 was released on March 1, and while it clearly shows that the bubble is no longer expanding insanely, prices have stabilized and there is still modest appreciation. In fact, the appreciation, 1.1 percent over the three month period, was slightly better than the 1.0 percent growth in the third quarter.

THE END FOR FLORIDIAN PROPERTY TAX?

Weeks after approving measures to reduce the burden of property insurance on Floridian householders, the Sunshine State’s lawmakers are turning their attention to property taxes – with the potential to do away with them altogether. This is the equivalent of UK abolishing council tax!

Under proposals currently being studied by the state legislature, Floridians’ skyrocketing property tax burden could be removed at a stroke, in exchange for an increase in the state’s sales tax from six per cent to 8.5 per cent  - which would make it the highest in the USA.

The proposals, supported by Governor Charlie Crist – who has described property tax as “the second part of the double whammy that has hurt the pocket books of Floridians” – would be split over two stages. Currently in preparation is a new bill which would reduce property taxes by approximately 20 per cent, providing “immediate relief to the property owners of Florida,” according to state congressman Michael Grant. This bill could take effect as early as July, according to local press reports.

The second, more radical stage, which would see the tax scrapped altogether, would have to be voted on by the Floridian electorate as it would involve an amendment to the state’s constitution. No timetable has been set for the plan, which is however unlikely to be introduced this year.

“If this constitutional amendment passes, every homestead property, every taxpayer in Florida, will not receive a trim notice, meaning they will not see a tax bill any more,” said state congressman Ray Sansom.