KUALA LUMPUR, Sept 30 — Former prime minister Datuk Seri Najib Razak said the Barisan Nasional administration’s efforts to reduce housing prices may not come to pass since the Sales and Service Tax (SST) has failed to bring it down.
In a Facebook post, he said the biggest cost factor for housing is not the construction, but the price of land — and to reduce the prices of homes, steps need to be taken to reduce the cost of land.
“The general affairs of land usage is under state governments. I noticed the costs and other charges imposed by the state governments for land usage especially in developed states such as Selangor and Penang has multiplied in the past 10 years,” said Najib.
Lowering the costs and charges would require the federal and state governments to work in tandem to achieve that.
He added land prices can also be reduced by increasing the preparation of cheap land from the state government or from land belonging to federal government agencies.
Najib observed that before and after the SST was implemented, Finance Minister Lim Guan Eng had promised several times that house prices would reduce since the raw materials for construction including sand, bricks and cement would be exempted from the tax.
Earlier on Thursday Lim had said during a property conference that the government might consider rethinking the exemptions and instead find new methods to make housing affordable especially for first-time buyers.
Najib said other required services including insurance, architects, negotiators, designers, and engineering are also SST-imposed, which under the now-repealed Goods and Services Tax developers could have claimed back.
“Bricks, sand and cement aside, other materials including glass and windows, wood, and ceramics are not SST-exempt.
“The BN government used several methods for affordable housing including building 35,753 1Malaysia Civil Servant Housing units with another 106,000 more in planning, and 80,000 Federal Territories Affordable Housing Project units which have either been built or are being completed,” he said.
Najib said these projects used the cross-subsidy method with private developers wherein the government did not have to pay a single cent for the construction of the units.
“In truth those working in KL or Johor Baru do not have to reside there, but instead live in Seremban or Batu Pahat, in Bentong or Mentakab and many other places where the cost of houses and land is far cheaper than KL.
“They just had to take the High-Speed Rail and East Coast Rail Line to go back and forth from KL and Johor Baru every day. This is commonplace for big cities in developed countries, but with the abolition of those projects this opportunity may not come to pass,” he said.
