No SST on residential properties under HDA, says Nga
Only 2% of building material tariff codes are affected by the SST hike, according to the housing and local government ministry.
PETALING JAYA : The housing and local government ministry has clarified that residential properties sold under the Housing Development Act (HDA) remain exempt from the expanded sales and service tax (SST).
Its minister, Nga Kor Ming, said this covers all residential buildings, including serviced apartments with commercial land titles, provided they are intended for residential use and fall under the scope of the HDA.
'The SST exemption is determined by either the land title or the intended use of the property,' he said in a statement today after consulting with finance minister II Amir Hamzah Azizan.
The clarification comes after receiving feedback from industry players about the expanded SST framework that begins from July 1 and its possible impact on housing costs.
Groups like the Real Estate and Housing Developers' Association (Rehda) and the Master Builders Association Malaysia had warned of cost pressures and disruptions to ongoing projects and businesses.
Under the new tax regime, a 6% service tax will be imposed on construction services for infrastructure, commercial, and industrial buildings, if the taxable value exceeds RM1.5 million annually.
Nga also addressed fears over cascading taxes, saying that a business-to-business (B2B) exemption mechanism ensures the service tax is imposed only once along the value chain.
He said the sales tax for basic construction materials such as cement, aggregates and sand remains at 0%.
Out of 400 tariff codes related to building materials, he said, tax hikes apply to only eight, including items like laminated glass and vats, affecting just 2% of materials.
Contractors may also separate material costs from service charges, allowing the SST to be applied solely to construction services.
'The housing and local government ministry remains committed to working with the finance ministry and key stakeholders to ensure fair tax implementation, protect homebuyers' interests, and support a sustainable housing sector,' Nga said.
'The ministry remains committed to preserving housing affordability and protecting homebuyers' interests under the revised SST framework.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
14 minutes ago
- Malay Mail
Tengku Zafrul: Malaysia, US aim to seal tariff deal before 90-day clock runs out
KUALA LUMPUR, June 22 — Malaysia's discussions with the United States (US) Trade Representative and the US Secretary of Commerce on ongoing tariff-related negotiations have made good progress, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz He said both Malaysia and US representatives have expressed their intention to finalise negotiations before the expiry of the 90-day pause on tariff implementation, and agreed to intensify efforts to reach an agreement acceptable to key stakeholders in both countries. In a statement today, he highlighted that the US has been one of Malaysia's top three export markets over the past decade. 'In May 2025, exports to the US recorded the eighth consecutive month of double-digit growth,' he said. A significant share of Malaysia's exports to the US supports and complements US domestic industries in sectors such as electrical and electronics (E&E), semiconductors, medical devices, machinery, equipment, and parts. Malaysia also serves as a key supplier of intermediate goods to US-based manufacturing industries. 'MITI has remained steadfast in upholding Malaysia's interests in all trade and investment relations, particularly in safeguarding the integrity of Malaysia's domestic commitments and sovereign rights,' he added. He further stated that MITI anticipates the negotiations will help secure Malaysia's supply chains and deliver positive spillovers to local businesses, especially small and medium enterprises (SMEs), while also creating more high-paying jobs for Malaysians. 'These efforts will further strengthen Malaysia's position as a preferred investment destination in the region and drive the Madani economic transformation agenda towards becoming a high-tech, high-income nation,' said Tengku Zafrul. Tengku Zafrul led a working visit to Washington, US, from June 18-20, 2025. The visit focused on continuing US tariff-related engagement and negotiations with US Trade Representative Jamieson Greer and US Secretary of Commerce Howard Lutnick. He was accompanied by MITI's chief negotiator, the Deputy Chief of Mission from the Embassy of Malaysia, and MITI officials based in Washington. — Bernama
Malay Mail
an hour ago
- Malay Mail
Malaysia taps fresh chip momentum with Intel, Vishay expansion plans
KUALA LUMPUR, June 22 — The Ministry of Investment, Trade and Industry (MITI) has held discussions with leading tech giant, Intel, regarding the latter's plans on reinvestment and expansion of its operations in Malaysia. Minister Tengku Datuk Seri Zafrul Abdul Aziz said Intel has invested RM50 billion to-date, and provided employment opportunities to 12,300 local workers. 'Intel's presence in Malaysia since 1972 has grown in tandem with the country's rise as a global semiconductor hub. 'This meeting reflects Intel's continued confidence in Malaysia as its key investment destination outside the United States,' he said in a post on the social media platform X today. He added that the Malaysian government, through MITI and the Malaysian Investment Development Authority (MIDA), remains fully committed to supporting Intel's expansion in the country. 'Under the New Industrial Master Plan 2030 (NIMP2030), and the National Semiconductor Strategy (NSS), we will continue to strengthen a sustainable and competitive industrial ecosystem,' Tengku Zafrul said. Meanwhile, in a separate post, the MITI minister said a United States-based manufacturer of discrete semiconductors and passive electronic components, Vishay Intertechnology, has expressed its intention to expand its operations in Malaysia. 'They already have a presence in Melaka, and the rise in the number of high-tech semiconductor facilities is in line with the objectives of NIMP2030 and NSS,' he added. Tengku Zafrul is currently on a working visit to Washington, United States. — Bernama
Free Malaysia Today
3 hours ago
- Free Malaysia Today
Expanded SST offers nation buffer in tough times, say economists
Economists say the expanded SST, which will take effect on July 1, will come in handy in times of global uncertainty. PETALING JAYA : The expansion of the sales and service tax (SST), set to take effect next month, will strengthen the government's fiscal buffer amid rising global uncertainty fuelled by wars, trade tensions, and shifting US policies. Economists say the move could help reduce national debt, raise tax revenue, and create more fiscal space for spending on critical areas such as healthcare, education, and targeted assistance for lower-income households. They also claim it is a safer and less costly option compared to reinstating the goods and services tax (GST), which would take time and effort to restart. Malaysia University of Science and Technology's Barjoyai Bardai said the SST expansion is not aimed at cost savings, but at boosting revenue to help narrow the country's budget deficit. Barjoyai Bardai. 'The government wants to collect more tax so that it can achieve the objective of reducing the deficit in the budget,' he said. Barjoyai said the government expects SST collection to hit RM52 billion this year, a big jump from the RM29 billion collected in its first year, and even higher than GST's peak of RM42 billion. 'If they can collect RM52 billion, then they can prove that SST is even better than GST. I believe SST can be developed into a better tax system than GST,' he said. He said the SST is generally more acceptable to the public as it does not affect consumers directly, with its primary targets being imports and manufacturing. 'So, people don't feel they are being taxed—at least psychologically,' he said. Yeah Kim Leng. Sunway University's Yeah Kim Leng pointed out that the country's tax-to-GDP ratio presently hovers just above 12%, one of the lowest levels in decades. He said the country can no longer depend on petroleum revenue or shrinking income taxes. 'We need to look for sustainable and stable revenue sources. Expanding the SST is a step in the right direction to gradually raise the revenue level so that we do not incur a higher deficit,' he said. Yeah said the additional revenue is needed to cover the rising costs associated with an ageing population, low retirement savings, and the need to improve essential services, particularly healthcare and education. 'It involves some sacrifices, some short-term pain in exchange for future gains. The expanded SST is not overly burdensome. They are targeting only luxury items and goods and services that are not essential,' he said. Afzanizam Abdul Rashid. Bank Muamalat chief economist Afzanizam Abdul Rashid said the SST expansion fits into the broader goal of fiscal reform. He said the service tax hike from 6% to 8% in March 2024 successfully raised SST revenue by 30.3% in the first quarter of 2025. That, together with the rationalisation of diesel subsidies, allowed the government to trim its fiscal deficit from RM26.4 billion (5.7% of the GDP) in the first quarter of 2024 to RM21.9 billion (4.5%) in the same period this year, said Afzanizam. 'This has allowed the government to allocate more for Sumbangan Tunai Rahmah and Sumbangan Asas Rahmah, totalling RM13 billion for 2025, from RM10 billion in 2024. 'This is the evidence of how fiscal consolidation exercises can help the government create a fiscal space so that it can spend on improving the livelihood of the rakyat in the short term,' he said. Afzanizam said that beyond cash handouts, the extra revenue could be channelled to improve productivity through better investment in education, health, infrastructure, and security. The SST expansion, effective July 1, will broaden the tax base to cover more imported goods and services, while keeping essentials tax-free to minimise inflationary pressure. Treasury secretary-general Johan Mahmood Merican said the expanded SST is expected to increase revenue by RM5 billion in 2025 and RM10 billion in 2026.
