It is business as usual for promoters of the Malaysia My Second Home (MM2H) programme, post the government’s announcement recently that a 5% Real Property Gains Tax (RPGT) will be levied from Jan 1, 2010, irrespective of when the property was acquired.  

Director of International Placement House (MM2H) Sdn Bhd Joseph Fernandez said he has not received any feedback from clients on the RPGT. “I think for foreigners, this is a small bite; it is the locals who will be more affected.” However, he noted, the RPGT could fan foreigners’ perception of a flip flop in Malaysia’s policies.

Poloair Consultancy (MM2H) Sdn Bhd executive director Adrian Wang concurred and said some of his clients were “quite annoyed with the constant change of policies as it confuses them”.

Metro Homes (MM2H) Sdn Bhd director See Kok Loong said he has not seen any significant negative impact on the programme but cautioned that Malaysia could lose out in the long run to countries such as Singapore, where no such tax existed. “But there is not much we can do but learn to adapt since the government has already said they will proceed with the tax,” added See.

Ck-Ten (MM2H) Sdn Bhd director and committee member of MM2H Agents Association John Ching said while there was dissatisfaction voiced by some programme applicants, there was no major complaint received and since there was no bubble in the Malaysian property market, the RPGT would not trigger any crash. Ching said the MM2H Agents Association would be meeting with the Tourism Minister soon and a discussion on the impact of the RPGT on MM2H is on the agenda.

A total of 1,133 applications for the Malaysia My Second Home (MM2H) programme have been approved in the first nine months of the year, according to sources from the Ministry of Tourism.

“During the period, we also have a good representational mix of participants with the top 10 markets being the UK (199), Iran (179), Japan (135), China (82), Pakistan (79), Bangladesh (72), Singapore (41), South Korea (38), the US (37) and Australia (36),” the sources said on Oct 20.

Generally, 68% of the MM2H participants are aged 50 years and above and 84% come with families while almost 40% have liquid assets valued at RM500,000 and above, they said.

“On average, they (MM2H participants) spend in the region of about RM1.2 billion a year in Malaysia, assuming a nine-month stay in Malaysia with an average expenditure of RM10,000 a month,” they added.

The sources said the number of applicants received and approved has been quite steady, in the region of 1,500 between 2007 and 2008. However, the number of applications received between January and September this year has fallen by 5.7% to 1,283 compared with 1,360 in the same period last year due to the recent global economic downturn.

MM2H is a programme promoted by the government to allow foreigners who fulfill certain criteria to stay in Malaysia for as long as possible via multiple entry social pass visits. The social pass visit is initially for a period of 10 years and is renewable.