The Ministry of Housing and Local Government (KPKT) reaffirms 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 Minister Nga Kor Ming.
He made the statement following a consultation with the Second Minister of Finance, YB Senator Datuk Seri Amir Hamzah Azizah, in response to feedback from industry stakeholders expressing concerns about the updated SST framework.
Nga further explained that the issue of cascading taxes is addressed through a Business-to-Business (B2B) exemption, ensuring that service tax is imposed at only one level.
According to the Ministry of Finance, basic construction materials, such as cement, aggregates, and sand, remain subject to 0% sales tax. Out of 400 tariff codes applicable to building materials, sales tax has been increased for only eight, covering items such as vats, laminated glass, and netting.
This will affect only 2% of the total building material tariff codes.
Contractors may choose to separate material costs from service charges, allowing the service tax to apply solely to construction services.
“KPKT remains committed to continuous engagement with the Ministry of Finance and other key stakeholders to ensure fair implementation of tax policies, safeguard the interests of homebuyers, and support a stable, sustainable housing sector.”
“In line with the Madani aspirations, KPKT remains committed to preserving housing affordability and protecting homebuyers’ interests under the revised SST framework,” he added.