Development News:- Government Widens GST Exempt Supply To All Stratified Residential Properties

PETALING JAYA – The government has agreed to extend the Goods and Services Tax (GST) exemption list from low-and medium-cost properties to stratified residential properties, say property-related professional bodies.

The bodies are the National House Buyers Association (HBA); Royal Institution of Surveyors Malaysia (RISM); Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector of Malaysia (PEPS); and Malaysian Institute of Professional Property Managers Malaysia (MIPPM).

HBA Secretary General Chang Kim Loong, their spokesperson, said following their petition dated Nov 28, 2014 to the Ministry of Finance (MOF), the latter gave a positive response in a letter dated Jan 5, 2015.

The petition had requested for a change in classification from the standard rated tax supply to zero rated tax supply for maintenance charges, sinking fund and all other related charges paid by parcel owners.

“The good news is that the GST exemption was extended to all stratified residential properties instead of just low- and medium-cost properties, showing the ministry had understood that there was an issue here, but the zero rated appeal was turned down,” said Chang at a press conference here Tuesday.

He said the MOF letter stated that the supplies made by management committees (MC) and joint management bodies (JMB) are deemed as conducting a form of business despite the supplies being for residential parcel owners.

He said the MOF also invited the professional bodies to convene a meeting soon on the gist of the contention.

PEPS advisor Wong Kok Soo said the bodies would reiterate the need to reclassify the GST to zero rated as only then would it benefit owners of stratified properties, who are mainly low- and middle-income earners.

He said there is no difference between the GST standard rated tax and exempt supply for stratified development areas, as the government would still get to collect six per cent tax which in the end is borne by parcel owners.

Extending the exempt supply to only residential properties would lead to complications in mixed-used development areas with both residential and commercial stratified properties, he said.

“We will highlight all of these issues when we meet the MOF, the rest we will leave to the government’s prerogative,” said Wong.

By: Bernama
Source: iProperty
Published on: Friday, January 23, 2015

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