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Reduce house prices or we'll revise SST exemption, Lim tells developers

The government might reconsider the sales and service tax (SST) exemption on construction materials and services if developers fail to reduce house prices, Finance Minister Lim Guan Eng said today.

He said the government has taken a positive step with the exemption and is now waiting for property players to reduce house prices.

"We want to see a reduction in prices. I am not interested to see add-on packages, that is meaningless," he told reporters after delivering the keynote address at the Annual Property Developers Conference Rehda Institute CEO Series 2018 in Kuala Lumpur today.

Organised by Rehda Institute, the one-day event saw participants discussing new ideas towards stimulating and rebuilding Malaysia’s economy with leaders of various industries and to give input to the government before the upcoming Budget 2019, as well as to look at new solutions to address the issue of unsold properties.

Meanwhile, Real Estate and Housing Development Association (Rehda) President Soam Heng Choon said the association acknowledged that the abolishment of the goods and services tax and the SST exemption on construction materials and services provided six percent of direct savings to consumers.

He said Rehda is currently undertaking a study on the possibility of reducing house prices and the report is expected to be presented soon.

On another note, Lim said the government is tweaking the levy payment structure of the extension of temporary foreign worker permits for workers with more than 10 years of working experience in the country, to ease the burden on employers.

He said under the new structure, employers will only pay 20 percent of the RM10,000 annual levy to renew the permit while the rest will be borne by the employees.

Previously, said Lim, employers would have had to pay the full amount, adding that the move is to encourage employers to retain workers with more than 10 years of experience as they are considered skilled workers.

"It is not worth it to send back trained workers and hire inexperienced foreign workers," he said.

On another development, Lim said the government is against the development of township properties exclusively for foreigners.

"The government will not accept any property development or township exclusively for foreigners," he said.