SST release may go if house prices don’t drop, Guan Eng tells builders

Developers previously insisted prices will not fall as a result of the exemption, saying material costs were only a minor portion of total construction costs. — Picture by Choo Choy May
Developers previously insisted prices will not fall as a result of the exemption, saying material costs were only a minor portion of total construction costs. — Picture by Choo Choy May

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KUALA LUMPUR, Sept 24 — Finance Minister Lim Guan Eng may “reconsider” exempting construction materials under the Sales and Service Tax (SST) if this does not lead to lower home prices.

Lim said the move was costing the government significantly in foregone revenue and was taken to specifically address high prevailing property prices despite the repeal of the Goods and Services Tax (GST).

“We (the government) are not interested in seeing any rebates or whatnot given to buyers.

“What we want to see is a reduction of house prices; that is all,” he said after delivering his keynote address during the Rehda Institute CEO Series 2018 at the Sunway Putra Hotel today.

Lim said he was also awaiting feedback from the Real Estate and Housing Developers’ Association (REHDA Malaysia) for the Budget 2019 he will table in November.

During his keynote address at the event, Lim said the federal government was monitoring the matter closely.

He explained that residential property prices were among his priorities as it was where policy decisions would most affect the people.

“We want to see a reduce in residential properties, in particular those priced at RM400,000 each and below,” he said.

Developers previously insisted prices will not fall as a result of the exemption, saying material costs were only a minor portion of total construction costs.

Real Estate and Housing Developers Association (REHDA) president Datuk Soam Heng Choon said his group acknowledged potential direct savings of six per cent for buyers of residential, commercial and industrial properties.

“We would want to call on all developers to pass on whatever savings to purchasers, on top of whatever discount and rebate they are giving,” Soam said.

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