Residential properties are exempt from SST, says minister
PETALING JAYA: Residential properties sold under the Housing Development Act (HDA) are exempt from the Sales and Services Tax (SST), says Nga Kor Ming.
The Housing and Local Government Minister explained the SST exemption is determined by either the land title or the intended use of the property.
"This means all residential buildings, including serviced apartments on commercial titles, are exempt from SST, as long as they are intended for residential use and fall under the purview of the HDA," he said in a statement on Sunday (June 15).
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.
He added that the issue of cascading taxes was addressed through a Business-to-Business (B2B) exemption, ensuring that service tax is imposed at only one level.
ALSO READ: Developers' operational costs expected to rise
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.
Nga added his ministry 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 Housing and Local Government Ministry remains committed to preserving housing affordability and protecting homebuyers' interests under the revised SST framework," he added.
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