PETALING JAYA: The country’s leading body for private developers is hoping that Putrajaya can reduce the goods and services tax (GST) rate imposed on building materials, especially those used in affordable housing projects.
The Real Estate and Housing Developers’ Association Malaysia (Rehda), which represents over 1,000 members, including Malaysia’s most well-known developers, has cited this as one of the main items on its 2018 Budget wish list.
Speaking to FMT, Rehda patron Ng Seing Liong said he hoped the government can exempt developers from paying the 6% GST on building materials to enable affordable housing projects, or at least reduce the amount.
“Across the board, we also hope that the GST rate on building materials can be reduced by 1% to 2% because these are big items.”
Depending on the type of property, building materials can account for around 50% or more of the cost of construction.
Ng also hoped the government would provide tax exemptions for machinery used in the industrialised building system (IBS).
Under IBS, components are manufactured in a controlled environment, either on site or off site, before being placed and assembled at the actual building site.
The IBS reduces construction time, allowing developers to complete and sell properties faster.
Henry Butcher Malaysia, a leading real estate agency, hopes measures to help stimulate the sluggish property market, and which will not lead to increasing prices, will be announced.
According to a recent report in The Star, figures from the National Property Information Centre (Napic) indicated RM10.08 billion worth of residential units in Malaysia were unsold in the first quarter of 2017.
“We would like to see policies that help first-time homebuyers in the forthcoming budget,” said Henry Butcher Malaysia chief operating officer Tang Chee Meng.
“This can take the form of further relaxation of stamp duties for first-time home buyers and those buying affordable homes.”
Tang said while policies which curb excessive speculation are lauded, bank lending guidelines could be further relaxed to encourage genuine buyers.
He also hoped the government wouldn’t introduce measures like higher stamp duties which deter genuine house buyers from purchasing properties.
When tabling the 2017 Budget last October, Prime Minister Najib Razak had announced that stamp duty for properties worth more than RM1 million would be increased from 3% to 4%, coming into effect from Jan 1, 2018.
Rehda had recently urged the government to postpone this, saying the property market still wasn’t ready for it, so soon after the introduction of GST, which it said had indirectly led to an increase in prices of homes.
Last year, in tabling the budget, Najib announced several measures to enhance the first-time home buyers’ ability to own a home, including an exemption of stamp duty for first-time homeowners for properties valued up to RM300,000.
Other measures included the provision of vacant land to government-linked companies and Perumahan Rakyat 1Malaysia (PR1MA) to build more than 30,000 houses for sale, the construction of 10,000 homes in urban areas to be rented out and subsidies to build 5,000 units of the People’s-Friendly Home (PMR).