For new buyers and first time owners of houses costing below RM100,000, the Government will provide a subsidy on housing loan interest payment of 3% for the first year or interest free loan on the deposit of 10% for the first year if the loan was obtained from Bank Simpanan Nasional (BSN).

For those who obtained loans from other financial institutions to purchase houses costing below RM100,000 under Bank Negara Lending Guide-lines on Housing Loans, a cash payment of RM600 will be given and credited to their loan accounts. This would apply those who purchased the hous-es from June 1st to May 31, 2004.

For new buyers of completed houses and first time owners of houses costing RM100,000 to RM180,000, there would be a tax relief on interest payments of RM5,000, RM3,000 and RM2,000 for the assessment year of 2003, 2004 and 2005, respectively.

There would also be a programme to improve the condition of Government-owned low-cost flats following criticism that they are too small and lack facilities.

"The Government will undertake programme to upgrade the exterior and improve the facilities of these flats," the report on simulating the nation's economic growth said.

It added RM200mil would be allocated to undertake improvement works for low-cost flats that are five years old and more.
This would include repainting, landscaping, fencing and as well as to providing recreational facilities such as playgrounds, libraries and childcare centers.

The implementation of the programme would be awarded to Class D and below bumiputra contractors and it was expected to generate more job opportunities and other related economic activities.

In line with the Government's objective to provide affordable housing for the lower income group, at least 150,000 units of medium-cost and affordable houses would be built within the next five years by Syarikat Perumahan Negara Berhad (SPNB).

SPNB would also purchase at least 4,400 completed but unsold apartments to be allocated for ex-police and armed forces personnel through hire purchase and buy-back schemes.

"They are only required to pay a monthly rental of RM50 and subsequently given the option to purchase these units after three years," it said, adding that the scheme would -also be made available to widows of government employees, including police and armed forces personnel as well as single mothers who did not own houses.

The National House Buyers Association welcomed the stimulus package, stating that any move that generates savings for housebuyers will be beneficial.

"This will encourage house ownership in accordance with the national aspiration of achieving the target of 'one family, one home'," said its secretary-general Chang Kim Loong.

He added that potential buyer should take advantage of the stimulus package but advised them to heed several precautionary measures.

"Now that there is a property overhang, they should select the property of their choice, and not buy just for the sake of buying," he said.

Chang added that potential, housebuyers should also make the effort to find out the background of developers and purchase from those with good track records.

"Potential housebuyers should also be encourage to buy completed units to reduce the overhang properties, as well as to minimize the 'occasional feuding' with developers," he said.

Chang, however, describe the measures introduced to expedite the processing and approval for certificates of fitness for occupation (CFO) as "re-inventing the wheel."

He said the Uniform Building Bylaws 1986 already provided that CFOs should be issued within14 days upon completion, and if the CFO was not issued within that time, one would be deemed to have been issued," he added.