Finance Minister Lim Guan Eng expects prices of new residential properties in Malaysia to decline by up 10 percent as the sales and service tax (SST) will not be imposed on all construction services and the price of building materials, reported The Edge.
“Previously, under the goods and services tax (GST), 6.0 percent was imposed on construction services. But under the SST, we decided not to impose the tax because we wanted to stimulate the property sector and hope it would lead to a decline in house prices,” he told reporters at the Parliament on Tuesday (30 Oct).
“(Hence,) for new houses that are not subject to the SST, we want to see a drop in the prices. Otherwise, we will consider re-imposing the 6.0 percent SST (on home builders).”
Guan Eng said buyers can look forward to lower prices for homes that have been completed yet and new launches. However, prices for properties presently being sold may have been computed based on the previous GST.
Nonetheless, he said the federal government will announce new measures to help people purchase residential properties at the highly-anticipated 2019 budget announcement on Friday (2 Nov).
Guan Eng said a 10 percent reduction in home prices is possible and reasonable because the exemption covers all construction services.
“When people asked me am I asking too much for a 10 percent reduction with the waiver of 6.0 percent tax, I say, no, we are very reasonable because we are talking about waiver of all construction services, including industrial, residential and commercial.”
“So developers which benefit from this (SST exemption), please pass it on to home buyers owners,” he added.
Image source: The Edge Markets
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email editorialteam@propertyguru.com.my
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