KUALA LUMPUR (June 13): Real Estate and Housing Developers’ Association (REHDA) is concerned that the 6% SST imposition on construction services will pose significant challenges for developers, primarily due to anticipated increases in operational costs.
“We have yet to determine the exact impact, but we expect the move will lead to a slowdown in the market as developers make adjustments to their plans,” said Datuk Ir Ho Hon Sang (pictured), president of REHDA.
“The industry is already bearing indirect taxes on construction-related items such as building materials and labour. The addition of the SST will only add to our burden. To maintain fairness, we sincerely hope that the SST will not be applied retrospectively. Any price hike adjusted to contracts signed prior to the effective date could result in cost overruns which leave developers with no choice but to absorb the additional cost,” said Ho via a media release.
He explained that while the exemption of residential buildings and public amenities related to housing offers some relief to the industry, concerns remain regarding developments on commercial land, such as serviced apartments in mixed developments, which will now be subject to SST.
“In today’s urban landscape especially 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,” said Ho.
According to Ho, the lower-income group will be equally affected or maybe even more, such as purchasers of affordable housing units located on commercial land under various programmes like Rumah Madani, Rumah Selangorku, and Rumah Mesra Rakyat.
Additionally, several local authorities mandate the inclusion of shop lots within strata residential developments, and the impact of SST will undoubtedly be felt by the owners of these units as well. To exacerbate the matter, infrastructure that are constructed within these developments will also be imposed with SST.
“We respectfully request the government to consider postponing the implementation date, currently set for approximately two weeks from now. Many of our SME members have yet to register with the Inland Revenue Board and a grace period until 2026 would provide sufficient time for them to make the necessary preparations,” appealed Ho.
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Source: EdgeProp.my
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