Malaysia GST does not affect house rent and maintenance fees

The Royal Malaysian Customs said the implementation of the goods and services tax (GST) should not be used as an excuse to increase house rents as well as maintenance bills for residential properties which are GST-exempt.

According to Raizam Mustapha, senior assistant director of Customs II, Real Property, Construction and Professionals sector, the development of buildings or land used for residential, agricultural land or for general purposes is not subject to GST.

“Any property in Malaysia categorised as residential is exempted (excluded) from GST,” said Raizam in a GST media briefing related to housing and property sector.

“Whereas, buildings that are not deemed residential buildings are considered commercial and subjected to six percent GST,” she added.

To be implemented from 1 April at the rate of six percent, the GST will replace the Sales and Services Tax (SST) which totals 16 percent.

She noted that maintenance bills are also exempted from GST in order to prevent occupants, particularly those in stratified residential properties, from being burdened.

Raizam added that any charges related to the maintenance bill of a building is determined by Management Corporation (MC) or Joint Management Body (JMB) and should not be associated with GST.

Presently, the MC or JMB is exempt from registering with the GST; hence, there should be no increase in maintenance bill.

“For cleaning purposes, the JMB or MC may get the services of parties (companies) which are not registered for GST, which has a turnover not exceeding RM500,000,” said Raizam.

She also revealed that residential land developers, under the GST era, can still recover the costs for developing public facilities such as religious houses, roads, schools and housing estates from the government via the input tax.

However, developers can only make the six percent claim if they surrender the public facilities built to the government.

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