Proposal for Vacancy Tax on Unsold Properties in Malaysia: A Misguided Approach

A recent article highlighted Khazanah Research Institute’s (KRI) call for the Malaysian government to consider a vacancy tax on unoccupied and unsold residential and commercial units. While similar taxes are practiced in cities like Vancouver and Melbourne, the proposal’s suitability for Malaysia’s property market is questioned by the National House Buyers Association (HBA).

Unlike countries where vacancy taxes are typically imposed on owners leaving homes vacant for extended periods, KRI’s suggestion targets property developers. HBA points out that Malaysian developers actively attempt to sell such properties, and the imposition of a vacancy tax on them might not resolve the issue.

The examples of Vancouver and Melbourne illustrate that vacancy taxes are aimed at compelling the productive use of properties, while Malaysia’s circumstances differ. Implementing a vacancy tax on developers may lead to higher property prices, as developers would likely factor in the additional costs.


Hong Kong and Singapore have imposed vacancy taxes on developers due to deliberate hoarding and speculation. However, Malaysia’s scenario involves developers struggling to sell properties, and the proposed tax may not be effective in this context.

To address overhang issues, HBA suggests comprehensive feasibility studies before project commencement. Independent studies, integrated housing databases, and collaborative measures among stakeholders are more prudent ways to tackle Malaysia’s property challenges.

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