Finance Minister Lim Guan Eng has called on developers to reduce house prices, otherwise the sales and services tax (SST) exemption may be reimposed on them, reported the New Straits Times.
“We want the cost saving from the SST exemption to be passed on to consumers. We may reconsider the exemption if they fail to reduce prices,” said Lim in his keynote speech at the Real Estate and Housing Development Association (REHDA) Institute CEO Series 2018.
Other than the SST exemption, the government has, in fact, introduced another cost-cutting measure for developers.
The government has slashed the levy paid by construction players for the extension of temporary foreign worker permit (PLKS) to 20 percent from 100 percent previously. Foreign workers will now have to pay the remaining 80 percent.
“For property demand to rise, (individual) income has to increase but it is going to take some time. But if we want developers to reduce prices, they will come to us and complain,” noted Lim.
“So we have introduced some measures for the property developers to reduce the prices. We understand the burden of the rising cost in property development, so construction players will now have to pay only 20 percent of the levy.”
Meanwhile, REHDA President Datuk Soam Heng Choon revealed that the association is currently studying the amount of savings developers will see from the new policies.
“The amount of savings will then be passed on to consumers. We expect to present in a month time before the Budget 2019 announcement.”
REHDA has noted that the SST exemption on construction materials and services translates to a six percent direct savings to consumers, he added.
Image sourced from NST Online
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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