The Malaysian government’s 2022 federal budget was announced yesterday on 29 October 2021. Below, we’ll summarize the general approach Budget 2022 will take as well as its impact on the real estate sector.
What is Budget 2022?
Malaysia’s Budget 2022 reflects an inclusive “Keluarga Malaysia” approach, which aligns with its policies and strategies outlined in the 12th Malaysia Plan. According to the pre-budget statement, Budget 2022 intends to focus on recovery, rebuilding, national resilience and catalysing reform. These actions will help to drive socio-economic recovery activities and the national development agenda. Prime Minister Datuk Seri Ismail Sabri Yaakob has said Budget 2022 is “from the people, by the people, for the people.” It’s expected to be of high impact for all layers of society and businesses.
In other words, Budget 2022 focuses on recuperating from the economic effects of the COVID-19 pandemic that has impacted the country over the past two years. It will also evaluate how to rebuild the fiscal resilience that was impacted by the high level of government commitment required to finance the stimulus packages and other assistance provided to both people and businesses during this time.
Budget 2022 Allocation
Budget 2022 has a total allocation of RM332.1bil. This is the largest-ever for the country and surpasses Budget 2021, which had an allocation of RM322.54bil.
What Does Budget 2022 Include?
Budget 2022 will benefit over 9.6 million recipients. Households with three or more children and an income less than RM2,500 will receive RM2,000 in aid. Moreover, an additional RM500 will be given to single parents with dependents, and senior citizens will be allocated RM300.
Just for Jobs
Budget 2022 will allocate RM4.8bil to create 600,000 jobs under the JaminKerja initiative. The initiative offers incentives to employers and additional funds (RM1.1bil) have been allocated for training and up skilling programmes for trainees.
Minister of Finance Tengku Zafrul said the intention is to meet industry needs and the additional allocation of RM200mil has been allocated for joint venture programmes with industries.
Housing for All
Another significant section of Budget 2022 is the RM1.5bil that dedicates funds for low-cost housing projects. Additionally, another RM2bil is for a housing credit guarantee scheme to assist all those without a stable income to purchase a house.
Tengku Zafrul stated that the government would cease to impose the real property gains tax (RPGT) when Malaysians, permanent residents, and companies dispose of their real property assets from the sixth year onwards.
Other initiatives included in Budget 2022 are those for education, civil servants, healthcare, public transportation, technology, women’s matters, sports, youth, tourism, defence, fisheries and agriculture, and more.
Sabah and Sarawak
The two states will receive increased development allocations of RM5.2bil and RM4.6bil respectively under Budget 2022.
Tax relief for renovation costs up to RM300,000 for landlords in order to keep up with SOP requirements such as air circulation and customer seating provisions
Tax relief for property owners providing at least 30% rental discounts to tenants until June 2022
Currently, Malaysians are still battling the difficult circumstances brought by the pandemic, and the Malaysian government has the opportunity to help the country navigate these challenges with Budget 2022. Budget 2022’s focus on housing for all will make waves in the real estate sector.
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