Penang rep moots 3% property premium on outstation buyers

Backbencher says levy could curb speculation and fund affordable housing for locals.

Debating the governor’s address in the state assembly, Ong Ah Teong (PH-Batu Lanchang) said some outstation buyers treated Penang properties as investment assets rather than homes, creating artificial demand and driving up prices, making it more difficult for locals to buy homes.

Ong proposed amending state land laws and regulations to introduce a 3% transfer premium on buyers or sellers who are not Penang-born, Penang permanent residents, or registered Penang voters for at least three terms.

“Property is a human right, not a speculative commodity for profit and wealth,” he said.

He added that Penang had 14,344 unsold homes as of the second quarter of 2024, mostly in the higher price range.

Ong warned that the issue would worsen if developers and agents continued to focus on high-end projects with higher profit margins.

He said this trend would lead to more unsold units and a property market that fails to meet the needs of ordinary Penangites. He also cautioned that a property bubble could form if prices fall sharply.

“When the market collapses, speculative investors from other states will leave Penang with their profits, while locals will be left to bear the burden of the downturn and resulting economic hardship,” he said.

He said proceeds from the 3% levy could be channelled to a housing trust fund for Rumah Mutiaraku projects and rent-to-own schemes for the B40 group and local youth.

Ong said similar ownership controls existed elsewhere, citing Kelantan’s land laws, native title restrictions in Sabah and Sarawak, Singapore’s additional duties on foreign buyers, and higher taxes on second homes in Spain.

Backbencher questions InvestPenang’s role after audit findings

Ong also asked whether InvestPenang should continue operating following “shocking” findings in the Auditor-General’s Report, which highlighted weaknesses in monitoring and internal controls involving the state investment agency.

He said the report included allegations that salary increments and bonus payments to the CEO were made without board approval, raising governance concerns.

Ong also criticised the agency for refusing to disclose salary and bonus details in the state assembly, citing non-disclosure agreements (NDAs). He argued that an NDA should not override legislative accountability, asking why InvestPenang appeared to operate differently from other GLCs.

He also pointed to issues raised in the audit report regarding overseas mission spending of more than RM500,000, and reporting that relied on Malaysian Investment Development Authority (Mida) data.

He questioned potential overlaps between InvestPenang and Mida, saying clarification was needed given the agency’s RM18.5 million in state funding.