LGE Reminds Developers In Malaysia To Reduce House Prices On A National Level
Building materials and construction services are exempted under the sales and services tax (SST).
By Alyssa J. Oon — 26 Sep 2018, 01:04 PM
With construction services exempted from sales and services tax (SST), Finance Minister Lim Guan Eng has urged developers to reduce prices of property on a national level
He was speaking at the Real Estate Housing Developers' Association Malaysia (Rehda) Institute CEO Series 2018 on 24 September.
"The government wants to see the reduction of house price(s). We are not interested to see developers giving out freebies from the saving(s). It is meaningless. All the people hope to buy cheaper homes," Lim reportedly said during the press conference, according to EdgeProp.
The SST exemption on construction services is meant to benefit Malaysians by making housing affordable
According to The Star, Lim said the decision to exempt construction services from being taxed under SST was because residential property prices are too high for Malaysian levels of income today.
He also said he is aware that there is a need for people's incomes to rise, but it will not be fast enough because an income rise will have to be accompanied by productivity.
"So we cut SST on construction services. So let us (the government and private developers) meet half way," Lim added.
Lim added that if developers fail to drop property prices, the SST exemption will be removed
"If this does not happen, then the government may have to rethink the exemption given and find new ways to make houses affordable, especially to first-time buyers," he said.
In response, Rehda president Datuk Soam Heng Choon called for developers' cooperation.
Soam also told EdgeProp, "Rehda Institute is doing a study now. We will present the study to the Finance Minister before Budget 2019 (is tabled) this year."
Budget 2019 will be tabled on 2 November.