Housing trust fund: Sheda Kuching urges govt to impose low levy to minimise cross-subsidy

Sheda Kuching branch chairman Dato Sim Kiang Chiok.

KUCHING, Jan 7: While policy change to levy imposition may impact house buyers similarly, it is advantageous for government to impose a low levy amount to minimise cross-subsidy, opines Dato Sim Kiang Chiok.

Sim, who is Sarawak Housing and Real Estate Developers’ Association (Sheda) Kuching chairman, said it presents an opportunity for the State government to reduce compliance costs in reducing cost of housing in Sarawak.

“It is also hoped that the levy will contribute to schemes like Sarawak’s First Home Deposit Scheme (HDAS) for the benefit of B40 individuals to own their home.

“The timing of levy imposition on a development is crucial; if too early, it could raise the capital cost for developer, affecting cash flow. Ideally, the levy should align with the issuance of subdivided titles or at the stage of OP issuance by Authorities,” he said in a statement today.

Sim said that the imposition of a levy or construction of affordable houses by private developers in Sarawak will also lead to cross-subsidy from medium/high-cost houses.

He said there is hope that, with the increasing income of the State government, a model similar to Singapore can be adopted, where all affordable houses are built by the government without cross-subsidy from medium/high cost houses.

“This could contribute to reducing the rising cost and thus prices of houses in Sarawak,” he added.

He also viewed the shift to impose levy instead of mandating construction of affordable housing for private developers as a progressive policy move aimed at managing the supply of affordable houses in Sarawak.

“The collected levy from developers will be deposited into a trust account and utilised by the State government through appointed agencies such as Housing Development Corporation (HDC), Land Custody and Development Authority (LCDA), or Sarawak Economic Development Corporation (SEDC) to construct affordable houses,” he said. — DayakDaily