Latest news with #HDA
The Star
3 days ago
- Business
- The Star
‘No SST on residential units'
Minister of Housing and Local Government Nga Kor Ming. PETALING JAYA: Residential properties sold under the Housing Development Act (HDA) are exempted from the Sales and Services Tax (SST), says Housing and Local Government Minister Nga Kor Ming (pic). He said the exemption is determined based on either the land title or the intended use of the property. 'This means all residential units, including serviced apartments on commercial titles, are exempted from SST as long as they are intended for residential use and fall under the HDA,' Nga said in a statement yesterday. The clarification follows Nga's consultation with Finance Minister II Datuk Seri Amir Hamzah Azizan amid concerns raised by industry stakeholders over the revised SST framework. To address the issue of cascading taxes, Nga said a business-to-business exemption has been implemented to ensure service tax is applied only once along the supply chain. According to the Finance Ministry, essential construction materials such as cement, aggregates and sand remain subjected to a 0% sales tax. Of the 400 tariff codes related to building materials, only eight, covering items such as vats, laminated glass and netting, have seen an increase in sales tax. This accounts for just 2% of the total codes. Contractors may also separate material and service charges in their billing, ensuring service tax applies only to the construction services provided. Nga stressed that his ministry will continue working closely with the Finance Ministry and key stakeholders to ensure the fair implementation of tax policies, safeguard home buyers' interests and support a stable and sustainable housing sector. 'In line with the Madani aspirations, the ministry remains committed to preserving housing affordability and protecting the interests of home buyers under the revised SST framework,' he added.
The Sun
3 days ago
- Business
- The Sun
Sarawak vows to link rural communities with roads by 2030
MIRI: The Sarawak government has pledged to connect all, or at least most, rural communities in the state to the road network by 2030, as part of an infrastructure push supported by nine regional development agencies. State Deputy Premier Datuk Amar Douglas Uggah Embas said each agency has been allocated RM1.5 billion, stressing that the funds must be used efficiently and without delay. 'It becomes an issue if these allocations are not spent. Our Premier Tan Sri Abang Johari Tun Openg expects the funds to be used promptly. 'When people are aware of these allocations, they expect action, improved roads, better access and better livelihoods. If not, they'll take to social media to express their frustration,' he said. Speaking at a Highland Development Agency (HDA) planning session here today, Uggah urged government departments to resolve project delays through on-the-ground coordination. HDA, one of the agencies driving the state's rural transformation agenda, has already committed RM1 billion to infrastructure and economic initiatives, with the remaining RM500 million expected to be utilised by mid-2026. He noted that much of Baram, in the Miri Division, still relies on former logging roads, many of which require urgent upgrades, maintenance or replacement of wooden bridges. 'The situation is complex. We must find a long-term solution for road maintenance,' he said, adding that he will lead a Sarawak Public Works Department (JKR) team to Bario in July for an on-site assessment. Beyond connectivity, Uggah highlighted Bario's untapped economic potential in agriculture and tourism, particularly in coffee and passion fruit cultivation, buffalo farming and handicrafts. He also noted the potential for buffalo milk cheese production, referencing a pilot project at the Meragang breeding station in Limbang. 'There's a large population of wild buffaloes owned by locals. I suggest looking into domesticating them,' he said. Uggah also urged local communities and agencies to leverage the region's rich cultural heritage to develop sustainable tourism. Among those in attendance at the session were Baram MP Datuk Anyie Ngau, Mulu assemblyman Datuk Gerawat Gala, Marudi assemblyman Datuk Dr Penguang Manggil, Telang Usan assemblyman Datuk Dennis Ngau and Regional Corridor Development Authority (RECODA) chief executive officer Datuk Ismawi Ismuni.
Borneo Post
3 days ago
- Business
- Borneo Post
Sarawak aims for full rural road connectivity by 2030, says Uggah
Uggah (centre) in a discussion with Ismawi (right) and others after officiating at the HDA laboratory today. KUCHING (June 18): The Sarawak government under the Gabungan Parti Sarawak (GPS) is committed to ensuring all rural settlements in the state are linked by road access by 2030, said Deputy Premier Datuk Amar Douglas Uggah. In a statement today, Uggah emphasised that this ambitious goal can be achieved through the implementation of key infrastructure projects under the jurisdiction of the state's nine regional development agencies. He stressed the importance of these agencies being able to efficiently utilise their allocations – amounting to RM1.5 billion – for infrastructure and economic development initiatives intended to uplift rural communities. 'It becomes an issue if you (regional development agencies) are not able to do so. Our Premier, Datuk Patinggi Tan Sri Abang Johari Tun Openg, expects the funds to be disbursed and used as soon as possible,' he said. 'People expect these allocations to be used to fulfill their expectations for better communication and better standard of living. 'If not, they will turn to social media to express their frustrations against the government and the elected representatives,' he added. Uggah, who is also State Infrastructure and Port Development Minister, made these remarks during the officiation of a Highland Development Agency (HDA) laboratory today, where proposed projects and programmes under the 13th Malaysia Plan were presented. According to him, the HDA has already channelled RM1 billion of its allocated funds towards various infrastructure and economic development projects. Uggah, also the HDA chairman, expressed hope that the remaining RM500 million would be fully utilised by the middle of next year. Highlighting challenges in the Baram region, Uggah pointed out that the area has numerous roads, especially old logging tracks that are in urgent need of maintenance, upgrades, or replacement bridges. 'The situation (there) is complicated. We must find long-term solutions,' he said, adding that he would lead a team from the Public Works Department (JKR) for a two-day site visit to Bario this July. Touching on the HAD's economic development efforts, Uggah noted that Bario holds strong potentials for agriculture, particularly coffee and passionfruit planting, as well as handicraft production and buffalo rearing. 'I understand there is a large wild buffalo population, though they belong to locals. I suggest the owners consider domesticating them,' he said. He also mentioned the Meragang buffalo breeding station in Limbang, where cheese production from buffalo milk is being explored as part of agro-based industry initiatives. Uggah added that Bario's unique local customs and culture could also be harnessed to develop the tourism sector. Accompanying Uggah were Baram MP Datuk Anyie Ngau, Mulu assemblyman Datuk Gerawat Gala, Marudi assemblyman Datu Dr Penguang Manggil, Telang Usan assemblyman Datuk Dennis Ngau, and the Regional Corridor Development Authority (Recoda) chief executive officer Datu Ismawi Ismuni. douglas uggah Highland Development Agency road access
![Revised SST could push property prices higher [BTTV]](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fassets%2FNST-Logo%402x.png%3Fid%3Db37a17055cb1ffea01f5&w=48&q=75){kind=small}
New Straits Times
4 days ago
- Business
- New Straits Times
Revised SST could push property prices higher [BTTV]
KUALA LUMPUR: Malaysia's property prices, especially in the commercial and industrial segments, are likely to rise as the revised Sales and Service Tax (SST), effective July 1, 2025, is set to increase construction and development costs. The sector may see some developers delaying project launches to reassess pricing strategies, safeguard profit margins, and re-evaluate overall project viability amid the evolving cost landscape. Olive Tree Property Consultants CEO Samuel Tan said the non-residential segment will likely bear the brunt of the tax hike, though broader ripple effects across the entire property market cannot be ruled out. Developers facing rising input costs are expected to pass these on to buyers, especially in commercial sectors like retail, office buildings, and industrial facilities, he told Business Times. Although residential properties are exempt from SST, Tan noted that indirect effects, such as shared infrastructure costs and inflation across a developer's portfolio, could still impact pricing in the housing segment. Under the revised SST framework, selected non-essential goods will be taxed at 5 per cent to 10 per cent, while construction services related to infrastructure, commercial, and industrial buildings, where taxable value exceeds RM1.5 million annually, will face a 6 per cent service tax. Tan warned that the SST's potential retrospective application could disrupt ongoing contracts, project timelines, and budgets, raising financial uncertainties. Tan urged the government to reconsider applying SST to the construction sector, which already bears multiple layers of taxation on materials, labour, and equipment. He also argued that the current timeline gives insufficient lead time for stakeholders to adapt. Tan suggested lowering the SST rate for construction services from 6 per cent to 4 per cent and limiting the tax to only the service portion of a project, excluding hardware and building materials. He also questioned the appropriateness of applying SST to construction, arguing that sales tax is meant for tangible goods sold by manufacturers, not services. "The construction sector involves labour and materials. Therefore, to impose SST on the construction sector is wrong. Construction is not providing a sale or service," he said. Tan highlighted that many pre-construction activities, like site clearing, planning, and regulatory approvals, already incur service taxes. Adding another layer risks double taxation, increasing project costs and ultimately burdening end purchasers. Residential exemptions and policy clarifications Housing and Local Government Minister Nga Kor Ming clarified on Sunday that residential properties sold under the Housing Development Act (HDA), including serviced apartments on commercial land intended for residential use, will be exempt from the revised SST. The exemption follows discussions with Finance Minister II Datuk Seri Amir Hamzah Azizan, in response to concerns from property developers about potential cascading tax effects. To prevent double taxation, the government will implement business-to-business (B2B) exemptions, ensuring that the service tax is applied only once in the transaction chain, Nga said, according to Bernama. The Finance Ministry also clarified that basic construction materials such as cement, sand, and aggregates will remain zero-rated. Of the 400 tariff codes for building materials, only eight will see a tax increase, affecting items like laminated glass, netting, and vats, representing just two per cent of all codes. Contractors may also separate material and service components in billing, ensuring SST applies solely to the service portion of the work. Nga reaffirmed the government's commitment to balancing fiscal reforms with housing affordability. Despite reassurances, analysts warned that the residential sector could see knock-on effects from higher non-residential construction costs. "For current commercial and industrial projects, developers may be locked into pre-agreed pricing and unable to shift the additional tax burden to buyers. But in future developments, cost transfers will depend on market demand," one analyst said. "In a weaker market, developers may absorb the added costs, compressing margins and delaying launches. In a stronger market, prices will likely be adjusted upward." Analysts also flagged a lack of clarity over how the SST will apply to existing contracts, leaving developers and contractors exposed to unexpected tax liabilities and project risks. "Without clear transitional guidelines, managing costs and contracts will become increasingly complex," said one expert. "Even if residential units remain tax-exempt, rising overall development costs may still push prices upward, especially in integrated or mixed-use projects." Malaysia's residential property market has been gradually stabilising over the past three years following pandemic-related disruptions and inflationary pressures. The market began to recover in 2023 after a sluggish 2022, with the national average home price rising by 3.3 per cent year-on-year to RM467,000, an increase of about RM15,000. The House Price Index (HPI) also showed positive momentum, with nationwide house prices growing by 3.2 per cent. Certain states outperformed the national average, with Negeri Sembilan posting the highest price growth at 6.5 per cent, followed by Johor at 6.2 per cent, suggesting rising demand and development beyond the Klang Valley. This uptrend was supported by improving market confidence, ongoing economic recovery, and renewed activity in both the primary and secondary markets. In the first half of 2024, the HPI reached 218.7 points, with the average home price edging up to RM471,918, a 0.9 per cent year-on-year increase. However, by year-end, the market began to show signs of cooling. The HPI reached about 222 points in Q4, with annual growth slowing to 1.4 per cent in December from 4.3 per cent in September. The slowdown was most notable in the high-rise and high-end segments in urban areas, where supply outpaced demand. In contrast, landed and suburban properties remained resilient, supported by sustained demand from families and owner-occupiers. As of early 2025, Malaysia's average home price stood at RM486,070, up 3 per cent from the beginning of 2024, indicating continued, albeit moderate, market stability. REHDA warns new SST will push up home prices The Real Estate and Housing Developers' Association (REHDA) Malaysia has raised concerns that the 6 per cent SST on construction services will raise developers' costs and likely lead to higher home prices. While acknowledging the Ministry of Finance's intention to boost government revenue through the revised SST structure, REHDA cautioned that the added tax burden could slow down the property sector. REHDA president Datuk Ir Ho Hon Sang said the association is still assessing the full impact, but the new SST could prompt developers to delay or revise projects, ultimately dampening market momentum. He noted that the industry already absorbs indirect taxes on materials and labour and warned that retroactive application of the SST could result in significant cost overruns. Contracts signed before the effective date should not be subject to the new tax. Developers may be forced to absorb costs, which is unsustainable, he said in a statement. Although residential and public housing projects are exempt, REHDA remains concerned about developments built on commercial land, especially serviced apartments within mixed-use projects. "In city centres, where residential units are often part of mixed developments due to land scarcity, subjecting these units to SST will inevitably lead to increased housing prices, ultimately impacting homebuyers who will have to bear the brunt," Ho said. He added that affordable housing schemes like Rumah Madani, Rumah Selangorku, and Rumah Mesra Rakyat may also be affected if located on commercial land. Moreover, some local authorities require commercial elements, such as shop lots, in strata residential developments. These, along with internal infrastructure, would also fall under the SST, further inflating costs. REHDA is urging the government to postpone the implementation, currently set to take effect in two weeks, and to consider a grace period until 2026. Many SME developers have yet to register with the Inland Revenue Board. A delay would provide them adequate time to comply, Ho said. Analysts: SST a negative surprise for the sector Maybank Investment Bank (Maybank IB) said the implementation of a 6 per cent SST on construction services is expected to weigh on property developers, particularly those with ongoing commercial and industrial projects that offer limited room to pass on rising costs. It cautions that for projects already sold or under construction, developers may be forced to absorb the additional tax burden, especially in cases where contracts include regulatory change clauses. This could lead to margin compression across various segments of the property development value chain, the bank said in a note. Maybank IB views the tax measure as a negative surprise for the sector and notes that it introduces further uncertainty at a time when the property market is already navigating soft demand and elevated costs. It highlighted that developers involved in data centre construction, such as Eco World Development Group Bhd (Eco World Malaysia) and Sime Darby Property Bhd (SD Property), could see project cost escalations that may erode internal rate of return (IRR). With data centres forming a strategic growth area for several developers, the added SST could reduce long-term profitability, the firm said. Moreover, Maybank IB said that developers with a significant exposure to investment properties such as malls could face dual pressure. It said that while the 8 per cent SST on rental income is typically borne by tenants, the ability to negotiate higher rents may be constrained in a subdued economic environment. Maybank IB also pointed out the lack of clarity around how the tax will be applied to ongoing contracts signed before 1 July 2025 but billed after that date. This ambiguity could further complicate financial planning and contract negotiations over the coming months. Developers may attempt to pass on the added costs in future or unsold projects. However, pricing power is likely to be limited by slower economic growth and cautious buyer sentiment, the bank said. In this context, it estimates a reduction of about 4 sen in the revised net asset value (RNAV) of Eco World Malaysia and SD Property due to increased construction costs associated with data centre projects. Despite the near-term headwinds, Maybank IB maintains a neutral stance on the overall property sector, pending further policy clarity. RHB Investment Bank Bhd believes the revised SST will have a limited overall impact on the property sector, thanks to sustained demand for industrial properties. In a research note, the bank said the ongoing US-China trade tensions and shifting global tariff policies are prompting more companies to relocate to Southeast Asia, benefiting industrial hubs like Iskandar Malaysia. "Sales of industrial properties as well as projects in Iskandar Malaysia remain strong year-to-date. Hence, although property companies will likely record a slight margin compression, the demand for industrial and commercial properties should stay healthy over the medium term," it said. RHB noted that the SST's inclusion of construction contracts and leasing income could slightly dent developers' profit margins. It said that developers with greater exposure to industrial and commercial segments are expected to bear higher costs, as contractors are likely to factor in the 6 per cent SST in future project bids. Projects already under construction will also face cost increases for remaining works. "Eventually, we expect developers to pass on the incremental costs to buyers, so new industrial and commercial property prices will likely be more expensive and market forces (demand and supply) will continue to play their role." MBAM: SST could strain construction sector The Master Builders Association Malaysia (MBAM) has urged the government to review the upcoming 6 per cent SST on construction services, warning that the move could severely strain cash flows and disrupt ongoing developments. The association said that the construction industry is already grappling with numerous financial burdens, including taxes on materials, labour, and equipment. With most contracts being fixed-price and time-bound, the imposition of SST, particularly if applied retrospectively, could lead to breaches of existing agreements, project delays, and escalating costs. The industry operates on tight margins and already bears statutory costs such as EPF contributions for foreign workers, CIDB levies, stamp duties, and HRD Corp contributions. Adding a new layer of tax at this stage could compromise project viability, MBAM said. To minimise disruption and ensure fair implementation, MBAM proposed several key measures. It urges the government to postpone SST application to new contracts signed after Jan 1, 2026, instead of July 1, 2025. The association also proposed reducing the tax rate from 6 per cent to 4 per cent and excluding the tax on ongoing projects to prevent unforeseen cost burdens on contractors bound by pre-agreed budgets. MBAM is also seeking that the government extend the exemption period for non-reviewable contracts from 12 to 24 months and expand the scope to include all contracts. Additionally, it is hoped that the government would limit SST to service elements only, excluding building materials and hardware, and align tax payments with certified progress claims rather than invoice dates, to better reflect actual work and ease liquidity issues. MBAM cautioned that most contractors are not financially equipped to shoulder these tax costs upfront, and doing so could derail projects or lead to insolvency. MBAM is also seeking that the government extend the exemption period for non-reviewable contracts from 12 to 24 months and expand the scope to include all contracts. Additionally, it is hoped that the government would limit SST to service elements only, excluding building materials and hardware, and align tax payments with certified progress claims rather than invoice dates, to better reflect actual work and ease liquidity issues. MBAM cautioned that most contractors are not financially equipped to shoulder these tax costs upfront, and doing so could derail projects or lead to insolvency.
Daily Express
6 days ago
- Business
- Daily Express
Residential properties under HDA exempted from SST
Published on: Monday, June 16, 2025 Published on: Mon, Jun 16, 2025 By: Bernama Text Size: The Finance Ministry clarified that basic construction materials such as cement, sand and aggregates will continue to be taxed at 0 per cent. Of the 400 tariff codes covering building materials, only eight will see an increase, affecting items such as laminated glass, netting and vats. - FMT pic for illustration only. PUTRAJAYA: Residential properties sold under the Housing Development Act (HDA) will be exempted from the update Sales and Services Tax (SST), following concerns from the construction industry over rising costs. Housing and Local Government Minister Nga Kor Ming said the exemption applies to all residential buildings, including serviced apartments built on commercial land, provided they are intended for residential use and fall under the HDA. Advertisement He said this following discussions with Finance Minister II, Datuk Seri Amir Hamzah Azizan after industry players raised concerns about the impact of cascading taxes under the revised SST framework. Nga said the issue will be addressed through business-to-business (B2B) exemptions, ensuring that the service tax is only applied at a single stage. The Finance Ministry clarified that basic construction materials such as cement, sand and aggregates will continue to be taxed at 0 per cent. Of the 400 tariff codes covering building materials, only eight will see an increase, affecting items such as laminated glass, netting and vats. 'This will affect only two per cent of the total building material tariff codes,' he said. Nga added that contractors may also separate material costs from service charges, allowing the service tax to apply solely to construction services. He noted that the government remains committed to balancing fiscal reforms with housing affordability. 'KPKT will continue engaging with the Finance Ministry and stakeholders to ensure fair implementation of tax policies and protect the interests of homebuyers,' he added.
