SST exempt on residential properties under Housing Development Act, says Nga
PETALING JAYA: Residential properties sold under the Housing Development Act (HDA) are not subject to the Sales and Services Tax (SST), says Housing and Local Government (KPKT) Minister Nga Kor Ming.
He said that the exemption is based on either the land title or the property's intended use.
'In essence, all residential units — including serviced apartments that sit on commercial land titles — are exempt from SST, provided they are meant for residential purposes and fall under HDA regulations,' he said in a statement yesterday.
Nga made this statement following a consultation with Finance Minister II Datuk Seri Amir Hamzah Azizan, in response to feedback from industry stakeholders expressing concerns about the updated SST framework.
The Housing Development (Control and Licensing) Act 1966 (HDA) is designed to regulate housing development and protect homebuyers when purchasing residential properties from developers.
The Act has undergone multiple amendments — especially in 2002, 2007, 2012, and 2015 — to strengthen consumer protection, regulate developers more strictly, and adapt to the evolving housing market in Malaysia.
Nga also explained that the issue of cascading taxes is addressed through a Business-to-Business (B2B) exemption, ensuring that service tax is imposed at only one level.
According to the Finance Ministry, basic construction materials such as cement, aggregates, and sand remain subject to 0% sales tax.
Out of 400 tariff codes applicable to building materials, sales tax has been increased for only eight, covering items such as vats, laminated glass, and netting.
This will affect only 2% of the total building material tariff codes.
'Contractors may choose to separate material costs from service charges, allowing the service tax to apply solely to construction services,' he added.
Nga added that KPKT remains committed to continuous engagement with the Finance Ministry and other key stakeholders to ensure fair implementation of tax policies, safeguard the interests of homebuyers, and support a stable, sustainable housing sector.
'In line with the Madani aspirations, the ministry remains committed to preserving housing affordability and protecting homebuyers' interests under the revised SST framework,' he added.
The Finance Ministry recently announced that the revised and expanded SST outlined in Budget 2025 will take effect on July 1, 2025.
A sales tax rate of five to 10 per cent will be imposed on selected non-essential goods.
The scope of the Service Tax will be extended to include new services such as rental or leasing, construction, finance, private healthcare, education, and beauty services, with a 6.0 per cent tax applicable to providers earning over RM1.5 million annually.
Amir Hamzah said the SST revision and expansion reflect an increasingly sophisticated tax system that reflects values of shared prosperity and, importantly, prevents the rich-poor gap from widening further.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
6 hours ago
- The Sun
FMM strongly objects to Port Klang's tariff hike, warns of hit to export competitiveness
PETALING JAYA: The Federation of Malaysian Manufacturing (FMM) has expressed its strong objection to the impending tariff increase at Port Klang, which was approved by the Ministry of Transport (MoT) and officially gazetted on Friday. The association said these cost increases come at a time when industries are already under immense pressure from global trade disruptions and significant domestic policy shifts. It noted that the new tariff increase place a severe burden on Malaysian manufacturers and further weaken the nation's export competitiveness while eroding Malaysia's position as a preferred regional trade and logistics hub. To note, the overall tariff revision at Port Klang, amounting to a 30% increase, will be implemented in three phases, with the first phase taking effect on July 1. Among the key changes that will heavily impact importers and exporters are a 30% hike in container handling charges and a steep escalation in container storage charges, which are set to rise by between 197% and 243%. FMM president Tan Sri Soh Thian Lai said while the association notes MoT's decision to stagger the port tariff increase over three phases following engagement with FMM and the Malaysian National Shippers' Council, FMM maintains that the timing remains deeply concerning. 'The sharp initial escalation beginning July 1, 2025 poses immediate and damaging consequences to the cost structures of exporters and importers alike. 'This comes at a time when industries are already contending with unresolved external shocks, including the ongoing US tariff threats on Malaysian exports, the expansion of the Sales and Service Tax (SST), and a scheduled restructuring of electricity tariffs. 'The convergence of these cost pressures will deliver a heavy blow to manufacturers and exporters at a critical juncture in Malaysia's economic recovery, further eroding the country's export competitiveness,' Soh said in a statement. Under the newly gazetted tariff structure by the Port Klang Authority, container handling charges for a 20-foot container will increase by 30% in total, implemented over three phases. The current rate of RM300 will eventually rise to RM390, with an estimated RM90 added per container upon full implementation. Given that Port Klang handles about 12.5 million TEUs annually, the full increase could translate to an additional RM1.125 billion in annual costs to industry once all phases are in effect. Soh noted that Malaysian ports have traditionally enjoyed a competitive edge due to reasonable cost structures. 'However, with the new rates, container handling fees will approach US$120–130 (RM509-552) per TEU, similar to rates in Singapore and Hong Kong, but well above Asean neighbours such as Vietnam, Indonesia, and Thailand. 'This will erode Malaysia's value proposition and increase the risk of cargo diversion to competing regional ports. 'Furthermore, Malaysia's drop to 34th in the IMD World Competitiveness Ranking and its current standing at 26th in the World Bank's Logistics Performance Index highlight the urgency of containing cost escalations. 'This tariff hike sends the wrong signal to investors and could significantly disrupt trade flow and business planning at a time when manufacturers are already struggling with margin pressures, high logistics costs, and global uncertainty,' Soh said. FMM said the government must take a holistic view of the cascading cost impacts on Malaysian businesses and consumers. 'Port tariffs, SST expansion, electricity hikes and international trade headwinds must be evaluated together. No single ministry or agency can make isolated decisions without assessing the full burden being placed on industry,' Soh said. FMM called for an immediate pause in the implementation of the port tariff increase, electricity base tariff revision and expanded SST scope. 'We urge the government to reconvene with industry stakeholders to reassess the economic and operational consequences and align all measures under a coordinated national cost impact strategy. If these measures proceed as scheduled, July 1, 2025 will mark a critical inflection point for Malaysian industry. 'A combination of port tariff hikes, new SST taxes, electricity cost increases, and global tariff threats will crash down on businesses, overwhelming their ability to remain competitive and sustainable. These cost increases will eventually translate into higher prices for consumers and a slowdown in manufacturing investment and job creation,' Soh said. FMM stands ready to work with the government to realign policy implementation timelines, ensure transparency in cost justifications, and develop a coordinated national strategy to support industry growth and protect the welfare of consumers.
Malay Mail
9 hours ago
- Malay Mail
Anwar hails progress on LCS project, stresses importance of good governance
LUMUT, June 15 — Prime Minister Datuk Seri Anwar Ibrahim has expressed his satisfaction with the progress of the Littoral Combat Ship (LCS) construction by Lumut Naval Shipyard (Lunas) at the Royal Malaysian Navy (RMN) base here, describing it as commendable. He said the progress demonstrated the government's strong commitment to prioritising national security assets and reflected the Madani government's emphasis on good governance. 'We regard the RMN as a key line of defence, as our waters are not immune to threats such as terrorism, potential foreign incursions and smuggling. That is why I agreed for the LCS project to continue under the Finance Ministry. 'Previous delays stemmed from weak management, governance issues and corruption. If the management is poor, how can we ensure maritime security? That's why good governance is essential,' he said in his speech at the Kenduri Rakyat programme held in conjunction with the Perak Madani Rakyat Programme 2025 at Shariff Hall, RMN Lumut here today. Also present was Communications Minister Datuk Fahmi Fadzil. Earlier, the prime minister visited the Lunas facility at the RMN base to inspect the ongoing LCS construction works. Meanwhile, Anwar said the government remains attentive to the need to enhance the country's defence assets, with the Defence Ministry being among the ministries receiving the largest allocations in the annual budget. 'Defence ranks third (in terms of allocation), after education and health. For 2025 alone, RM21.2 billion has been allocated - a significant amount for a developing nation,' he said. He added that the move reflected the government's appreciation of the sacrifices made by the security forces and was aimed at ensuring national stability, which is crucial for economic growth. Anwar also said he is often moved when learning of the poor condition of certain security assets that are still in use to safeguard the nation. 'That's why, upon the formation of the Madani Government, I called in all the armed forces chiefs and asked them to outline their priority needs. Based on that, we work to secure sufficient funding to improve our defence machinery and assets,' he said. — Bernama
Malaysiakini
9 hours ago
- Malaysiakini
PM zeroes in on avocados amid backlash over imported fruits' SST
Prime Minister Anwar Ibrahim has defended the expanded Sales and Services Tax (SST), particularly on imported fruits, saying the move aimed to tax the wealthy. Touching on the five percent tax on imported fruits, Anwar gave the impression that this would only impact those who consume expensive fruits like avocados.
