Residences under Housing Development Act exempt from SST

Summary

• Residential properties under the Housing Development Act, including serviced apartments intended for residential use, are exempt from SST under the revised framework.

• Only 2pct of building material tariff codes are affected by the SST hike; ministry assures continued collaboration to protect homebuyers and uphold housing affordability.

The Housing and Local Government Ministry has reaffirmed that residential properties sold under the Housing Development Act (HDA) are exempted from the Sales and Services Tax (SST).

“The SST exemption is determined by either the land title or the intended use of the property.

“This means all residential buildings, including serviced apartments on commercial titles, are exempted from SST as long as they are intended for residential use and fall under the purview of the HDA,” said Housing and Local Government Minister Nga Kor Ming.

His clarification follows a consultation with the Second Finance Minister Amir Hamzah Azizan, and was in response to concerns raised by industry stakeholders regarding the updated SST framework.

Nga also addressed concerns over cascading taxes, stating that the business-to-business (B2B) exemption mechanism ensures that the service tax is applied at only one level.

According to the Finance Ministry, essential construction materials such as cement, aggregates, and sand remain taxed at zero percent.

Out of 400 building material tariff codes, the SST rate was raised for only eight items, including vats, laminated glass, and netting, representing just two percent of the total.

Contractors also have the option to separate material costs from service charges, allowing SST to apply solely to the construction service portion.

“The Housing and Local Government Ministry remains committed to continuous engagement with the Finance Ministry and other key stakeholders to ensure fair implementation of tax policies, safeguard the interests of homebuyers, and support a stable, sustainable housing sector,” said Nga.

“In line with Madani aspirations, the ministry remains committed to preserving housing affordability and protecting homebuyers’ interests under the revised SST framework,” he added.

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