Finance Ministry: Houses up to 10% cheaper with SST exemption

KUALA LUMPUR: Hopeful homeowners can now rejoice as the cost of new homes are expected to fall between five and 10% following the Sales and Services tax (SST) exemption on construction services and building materials.

"We placed the exemption because we want to boost the real estate sector. We hope to see a fall in new house prices," Finance Minister Lim Guan Eng (pic) said to reporters at Parliament on Tuesday (Oct 30).

"Otherwise, we will consider re-imposing the SST (on developers)," he added.

However, Lim said that the discounts are only applicable to newly-launched homes and does not include low-cost housing projects.

"For existing units that have been built, you will have to wait until Budget Day this Friday (Nov 2)," he quipped.

Also present during the press conference was Real Estate and Housing Developers' Association Malaysia (Rehda) president Datuk Soam Heng Choon.

"We hope that buyers will take this opportunity to make their purchase in view of the discounts given, as part of our efforts to assist the government to help the rakyat own homes," said Soam.

At the same time, Lim also thanked Rehda for pledging support on the government initiative despite short notice.

"I wish that it would be a 10% discount, but we will give Rehda time to work towards achieving that goal," he said, adding that Rehda had already spoken to its members regarding the initiative.

Lim said as the SST exemption is applicable to all types of construction services, he hoped that savings in development costs by developers will trickle down to home buyers.

"People asked me if I'm asking too much for a 10% discount with the 6% tax exemption. I said 'no', we are very reasonable because we are talking about waiving all construction services, including industrial, residential and commercial," he said.

"So, to developers who will benefit from the tax exemption, please pass it on to home owners," said Lim.