Housing developers irked by RM50,000 'social contribution fee'
27 Mar 2007 NST

KUALA LUMPUR, TUES:

A move by the Selangor government to impose a "social contribution fee" has not gone down well with housing developers.

Real Estate and Developers Association of Malaysia president Ng Seing Liong described the RM50,000 fee per 0.4ha for projects in town areas as unfair.

For development in rural areas, the fee is RM35,000.

The fee, introduced last September, however, only applies to projects less than four hectares.

Ng claimed the money would be used to build schools and other facilities for which funds were already allocated by the government.

"It is such a hefty sum. On top of that, developers are already required to pay a 15 per cent conversion fee," said Ng.

He said the victims of the move would be small- and medium-sized developers as they were the ones who normally undertook projects less than four hectares.

"Instead, big projects developed by the major developers are exempted. The ones who can afford it don’t pay while the ones who can’t have to."

Ng claimed some projects had been delayed as developers refused to pay the fee.

He, however, was hopeful that things would improve for the housing industry following the abolition of the real property gains tax on April 1 and the announcement by the prime minister on April 13 of a new system to ease procedures for development projects.

"We expect Datuk Seri Abdullah Ahmad Badawi to bring more good news to the property and construction industry," said Ng.

Selangor Housing and Squatters Committee chairman Datuk Mokhtar Dahalan said the decision to impose the fee had been thoroughly studied.

"The money collected will be used to build parks and other public facilities."

Mokhtar said the ruling would not be withdrawn despite protests from developers.