The recent Real Property Gains (RPGT) exemption announcement provides a huge incentive for property sellers. In light of the Covid-19 outbreak, Prime Minister Tan Sri Muhyiddin Yassin introduced several measures to help boost the property market. Property sellers will be exempted from paying the 5% or higher RPGT for the disposal of properties from 1 June 2020 and 31 December 2021. However, this exemption is limited to Malaysian citizens and for the disposal of three units of residential homes per individual.
Let us begin!
1. Clear all your outstanding payments
To make your house available for the next owner, you must clear all outstanding payments which are tied up with the house. Not sure what’s left? Follow the checklist below:
Rental income tax
- Malaysian citizens and permanent residents are liable to pay around 0%-28% tax on rental income
- Foreigners and non-permanent residents are obligated to pay a flat rate of 28% on their rental income
Average time: The time needed to clear all these payments and compile the receipts depends on how regularly you attend to your payment obligations. If you’re fairly on schedule, this phase can be completed in a day.
2. Get a valuer to assess your property valueThe list price or sales price of your property depends on your property’s worth. This step is only valid if your house is a sub-sale property. Therefore, if you are selling a newly launched property, you can skip this step.
Although there are a few ways to assess your property value – like checking with local real estate agents, asking a banker or browsing online property platforms – the best way is to appoint a professional valuer. A valuer will be able to help you determine the right selling price by assessing market data, property type, price of similar properties in the surrounding area, and other valuable market factors.
Be sure to hire a valuer from an authorised firm, or valuation experts who are representatives of a bank. We recommend confirming that the valuer or valuation company is registered with the Board of Valuers, Appraisers and Estate Agents Malaysia (BOVAEA) before proceeding. Then, you can move to secure an appointment with your valuer of choice and set a time for them to visit your property for valuation. The valuer will then assess your unit and produce a report with an estimated value of your property.
Average time: The whole process may take around 1 week to complete.
3. Set your property’s sales priceThe valuer determines your property value based on data and their assessment. However, this should not be your only indicator for setting the final selling price. Residential properties that are attractively priced relative to their market value, will attract buyers even if they are not located in a hotspot location or boast a new and glossy facade.
Pricing your home largely depends on your personal goals as a seller – are you in need of cash and is looking for a quick sale or do you have the holding power to wait for the right buyer who is willing to pay your desired asking price? Once you have decided on this, there are several things that you should find out:
What is the current buying sentiment in your area?
How competitive is your property?
Average time: This ultimately depends on how long you take to conduct your research and due diligence. You should be able to complete your assessment within a week.
4. Decide on your target buyers to help you sell faster
Once you know your property’s worth, you can focus on the type of buyers who are looking for properties like yours. This will increase your chances of having a profitable and fuss-free sale. Based on your property’s characteristics, build a rough persona of your target buyer, their income level, current living circumstance, and household size. Other questions to ask include:
- Will you prefer a cash buyer?
- Are you open to selling your property to foreigners?
- Do you want to focus on first-time homebuyers? (as they could secure a higher margin of financing from banks)
Average time: This can be sorted out within a day.
5. Get some home improvements done to increase the value of your propertyFirst impressions are everything when you are presenting your house to a potential buyer. Your house must look presentable before you put it up for sale in the local market, but it is also wise to take a few extra steps to further boost your home’s appeal.
Some of the things that you could do besides basic repairs include:
- A fresh paint job
- Refacing your kitchen cabinets and surfaces if they are outdated (the kitchen is the heart of the home after all!)
- Redo the lighting in each room – setting the right mood and ambiance is more important than you think.
- Declutter your home but don’t overdo it to the point where it is no longer homey.
- Tidy up the garden and clean the patio and gutters thoroughly.
Average time: Depending on the amount of work you put into the works, it may take about 1-3 months to create a beautiful first impression.
P.S. If you're looking to buy a house to take advantage of the HOC 2020 Campaign, check out Loanstreet's home loan eligibility report to determine whether you can get your finances approved.
This article was repurposed from "How long does it take to sell a house in Malaysia?", first published on iProperty.com.my