Surcharge on super condos in Penang?

The state is looking at imposing surcharge on super condominiums, and the amount collected will be used to build affordable housing for the people, said Penang Chief Minister Lim Guan Eng.

He said such a move would help the state government to absorb the cost of building affordable homes.

“This will come under the charge of Penang Housing Board which will be established on July 1,” he said in his winding up speech at the state assembly.

At this juncture, Muhammad Farid Saad (BN-Pulau Betong) stood up and urged Lim to come up with a mechanism meant to compensate the people whose houses have to be demolished to make way for development.

To this, Lim said the state would ensure that nobody, including the landowners, squatters or developers, is short-changed even though they are still coming up with a mechanism on this issue.

“If the imposing of a charge on super condominiums for the construction of affordable housing was implemented in the state, it would also be a first in the country.

“The state was studying the move where the amount collected would be used to supply and provide affordable housing to the people in Penang.

“We are imposing a contribution, not a tax. We cannot impose taxes,” he said in a press conference after the state assembly sitting.

He added: “We don’t know the price to be imposed. Maybe before the occupation certificate (OC) is issued, they (the developer) will have to pay a certain contribution if they build houses above a certain limit.”

State Town and Country Planning, Housing and Arts Committee chairman Wong Hon Wai and Local Government and Traffic Management Committee chairman Chow Kon Yeow have been directed to look into the move.

Earlier, the water conservation surcharge became a matter of contention again between Lim and Datuk Arif Shah Omar Shah (BN-Seberang Jaya).

The latter said the surcharge would be unfair to big households and would be a burden to the head of the family.

To this, Lim said the surcharge of 24 sen per 1,000 litre for domestic users who use more than 35,000 litres of water was meant to encourage Penangites to conserve water.

“The Penang Water Supply Corporation (PBAPP) had carried out studies on the matter before deciding on the implementation.

“Since the implementation of surcharge, the average usage of water for domestic users had dropped to 286 litres from 291 litres per day. We hope to achieve the national average of 202 litres per day,” he said. - By Derrick Vinesh, Christina Chin, Tan Sin Chow, Josephine Jalleh and Fong Kee Soon at the Penang State Assembly (The Star)


May 11, 2011 at 2:45 PMAnonymous Anonymous

The State Gov should also look into imposing congestion charge on vehicles traveling into the island during festive seasons. The amount collected can be used to build more roads, improve road condition and facilitate public transport services.

May 11, 2011 at 4:51 PMcondomana

Dear A,

This sounds like a stupid idea. Good try anyway.

May 11, 2011 at 5:52 PMPeter

I think A suggestion is a good idea.

Road congestion will only get worst, and yet you see many are travelling alone in a car.

Imposing a charge on entering specific area in Penang is a way to encourage users to use public transport or car pool.

Do limited trials in specific areas first, and make sure that area is well served by alternative public transport.

May 11, 2011 at 7:44 PMkucing

The government should impose surcharge (or whatever you call it) on those developers, speculators for sale of property above certain amount (say 500k and above), maybe with the scale of % , the higher the price, the higher the % of sur charge (like income tax rate),
or can exempt those one-home owner (protect genuine home-owners from speculators)!

These move shall be applauded !

Charge the filthy rich / greedy bastard to compensate the poor and needy !

As I experience, most of those filthy rich / greedy property speculators are mostly stingy bastards who could bargain up to earning nano cent from poor people and never even give a nano cent for donation through out their fucking stingy life !
(although no genaralisation, most of them are rich MNC factory executives !
I "kena"-ed many times from these stingy bunch !
-- suka bull shit and action mereka kaya dengan rumah-rumah, tetapi keluar makan / minum tak mahu keluar dompet bayar, tunggu aku kasih dia !!)

May 11, 2011 at 9:38 PMpacific

imposing levy on expensive property is not a permanent solution to the chronic shortage of affordable housing for the general population-its anathema to free market principle!!
speculation or investment in any financial instrument is a double edge sword-it cuts both ways- if one bet the wrong way one may lose his pants while one may be laughing all the way to the bank when the bet is right
in fact we already have this tax of x% if property is transacted within 5 suggestion is that the gomen increased this tax if indeed speculation is rife.

however,we have yet reached the 'breaking' point as compared to markets in australia,singapore and hk whereby an imminent correction is not unexpected anytime soon.

well with QE2 and the low interest rate environment most believe it will be at least a couple of years more before property lends herself to a major correction

May 11, 2011 at 11:21 PMcondomana

Dear kucing,

I am with you.

Dear pacific,

I am very interested to hear your explaination on why you think imposing a levy is not a solution to solving the problem of affordable housing shortage.

Free market works when you have a good regulatory framework to keep things in check.

The recent "subprime crisis" in the US is a good example of free market gone haywire without proper regulatory supervision. "Free market" was the culprit for 1997 asian financial crisis, Dr Mahathir was criticized by IMF at that time for imposing capital controls, but 10 years later, capital control is one of the many tools the IMF recommend to keep things in control during capital crisis. Free market without intervention and controls? Don't kid ourselves, we're not there yet!!

You wouldn't want to wait until things reach "breaking" point. This is the right time for regulators to intervene, and hopefully we don't have to go through a "major" correction when the time comes for other countries to go through that. This is the kind of resilience we (Bank Negara & other regulators) should aim to achieve!!

May 12, 2011 at 12:03 PMkevin

The whole idea sounds like new economic policy without racial issue involved how about we adopt commusism that will be fair for everybody

May 12, 2011 at 2:00 PMThe Disavowed Me

i dunno this type of strategy seems unfair to the buyers of supercondo...

May 12, 2011 at 2:04 PMThe Disavowed Me

expensive supercondo buyers are not responsible for the shortage of affordable homes in penang....
now this plan might end up affecting the new proposals for super condo on the island... why cant they come up with a better strategy... the system in malaysia is forever useless... esp when u let the lau lang to make decision...

May 12, 2011 at 2:10 PMThe Disavowed Me

kucing... not all rich people are greedy people... there are rich ones who became rich through hardwork... govt is the one which is responsible to build affordable homes... probably they swindle the money and expect the private developers to build.. how can... developers are businessman... u can expect them to care bout social welfare... what the ovt is delusional and dreaming or what.... funny

May 12, 2011 at 2:19 PMThe Disavowed Me

sorry mistyped...i mean u can't expect developers to care about social welfare...developers are businessman ...the govt is delusional and dreaming...

May 12, 2011 at 2:46 PMkevin

kucing i think u r promoting NEP.everybody pays tax whatever welfare should be passed on to gov

May 12, 2011 at 3:23 PMkucing

The Disavowed Me,

Ok, i agree with you that not all rich people are greedy, but mostly are greedy and stingy.
Stingy in a sense that they would take every opportunity to exploit others or squeeze a single cent or two out of you ! (looks very "Pa Liah" !)
(I know this is out of topic here, just that recently I met many of those super-stingy multi millionaire and just want to vent my frustration here, sorry !) :)
That's why they become rich !

Anyway, we need to balance and narrow the gap between the rich and the poor ! Otherwise social unrest will be round the corner !! (remember how 513 happens ?)

May 12, 2011 at 3:51 PMkevin

narrowing the gap is definitely not robbing the rich and fill up the poor.driving our existing middle class to hi income group is the correct path thru micron and macro economic improvement and again 513 is totally irrelavant to inequal wealth distribution.There are penny pincher in every single class it is just personal attitude problem