Penang may face lawsuits over property sale restrictions

PHOTO: Penang may face lawsuits over property sale restrictions

GEORGE TOWN - The Penang government's move to impose restrictions on the sale of properties in the state is illegal, said Gerakan national legal and human rights bureau head Baljit Singh.

He said the National Land Code would have to be revised first before the new regulation could be enacted.

"Penang Chief Minister Lim Guan Eng cannot just pass the ruling at the state legislative assembly level as there's nothing in the code to allow for such a ruling," Baljit said.

"When a property is bought in the open market, there are no restrictions unless the property is developed and subsidised by the state government," he said in an interview yesterday.

National Gerakan Youth chief Tan Keng Liang said the state government should be prepared to face legal action if they "bulldozed" its way into implementing the rules retrospectively as the property owners would have grounds to challenge it.

"If a state government wishes to implement such rules, it must be stated clearly in the house's land or strata title.

"I find that it is only applicable to new projects as the state can include it in the sales and purchase agreement for the new houses," he said.

On Monday, Lim announced new housing regulations to curb property speculation, which would take effect from Feb 1 next year.

The new rules include a five-year moratorium for affordable homes bought below RM400,000 (S$155,000) on the island and RM250,000 on the mainland, and a 10-year moratorium for low and low-medium cost housing units priced up to RM72,500.

Tan said the move to impose a 2% levy on the sale of houses above RM400,000 would further burden house buyers since it was a form of tax collected by the state.

He added that the Federal Government had already increased the Real Property Gains Tax to prevent property speculations and that the new ruling imposed by the DAP-led state government would further burden house owners.

Meanwhile, Penang Housing, Town and Country Planning Committee chairman Jagdeep Singh Deo said as long as the seller was willing to pay the 2% levy, any property priced above RM250,000 in Seberang Prai and above RM400,000 on the island could be sold within three years.

He stressed that the new ruling only affected the properties bought with the sales and purchase agreement signed from Feb 1 next year.