Maintenance fees for flats, condos likely up 10pc after GST, owners warned

According to a media report today, BMAM president Tan Sri Eddy Chen said the estimated 10 per cent hike is to meet higher operating costs. — Reuters pic
According to a media report today, BMAM president Tan Sri Eddy Chen said the estimated 10 per cent hike is to meet higher operating costs. — Reuters pic

KUALA LUMPUR, March 1 — Owners of flats, apartments and condominiums may have to fork out 10 per cent more for maintenance fees after April when the Goods and Services Tax (GST) is implemented, the Building Managers Association of Malaysia (BMAM) warned.

According to The Star’s report today, BMAM president Tan Sri Eddy Chen said the estimated 10 per cent hike is to meet higher operating costs.

He explained that although maintenance fees are GST-exempt, management bodies are still charged the new consumption tax when they engage the services of contractors for maintenance works.

The Star reported Tan as saying that maintenance fees should be increased by at least six per cent, taking into account the failure of some to settle even their arrears.

“In the case of low- and medium-cost flats, about 40 per cent of the owners do not pay their monthly maintenance fees of between RM35 and RM70 monthly.

“So, even if only 50 per cent pay, the maintenance fees will have to be increased by 12 per cent to cover the shortfall and the six per cent in GST to be paid to service providers,” he was quoted saying.

According to the daily, the BMAM is an umbrella body consisting of 25 organisations representing management corporations (MCs), joint management bodies (JMBs), chambers of commerce, developers, engineers, architects, shopping and high-rise complex managers and managing agents.

The report today also quoted BMAM deputy president Tan Sri Teo Chiang Kok as explaining that of the 1.8 million strata properties in Malaysia at present, over 90 per cent are residential.

He said the association is afraid that more low- to medium-cost flat owners may become defaulters once the GST is implemented.

“We have reminded all JMBs and MCs to call for open tenders and only select those offering the best service at the lowest cost (to keep maintenance fees low),” he reportedly said.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) and National House Buyers Association (HBA) adviser Wong Kok Soo said in the report that at least 99 per cent of maintenance charges collected by JMBs and MCs are to pay service providers, contractors, suppliers and utilities.

This, he explained, would mean the JMBs and MCs may be forced to increase their charges after the GST.

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