Rehda: Exclude houses below RM500,000 from GST

PETALING JAYA: Houses costing less than RM500,000 should be exempted from the Goods and Services Tax (GST) to encourage developers to build more affordable homes, especially in Kuala Lumpur, Johor and Penang.

“In principle, we support the Government’s implementation of GST, which we think is a more equitable taxation scheme in the long run,” said the Real Estate and Housing Developers’ Association (Rehda) yesterday.

However, the association proposed that the Developer Interest-Bearing Scheme (DIBS), under which house buyers would pay a small down payment during the signing of the sale and purchase agreement (SPA), should be extended to first-time buyers for homes below RM500,000.

In its wish list for Budget 2015, Rehda said that the MyHome Scheme, which provided a RM30,000 incentive for each affordable house, should include first-time buyers.

“The developer should also be given a waiver by the Government to build low-cost homes. And in lieu of this, the developer shall pay a sum for every unit waived, similar to the existing model practised by City Hall since both the federal and state governments own substantial land banks,” it said.

Masters Builders Association president Mathew Tee urged the Government to further reduce corporate tax from 24% to 17% to be on par with other South-East Asian countries.

Mah Sing group managing director and group CEO Tan Sri Leong Hoy Kum hoped that the Government would consider classifying certain property industry-related items as zero-rated under GST, especially the key components of materials and services.

“We also hope that all types of contracts made prior to the announcement of GST will be entitled to zero-rating during the transition period. For SPAs on land before April 1 next year, payments received or invoices issued before this date should not attract GST even if the supply of land is made after the tax comes into effect,” he said. 

Leong said for further stimulus, tax relief should be extended to all interest incurred on the end financing for the first home.

“Alternatively, perhaps the Government can also consider providing grants of up to 10% on the purchase price of affordable properties to first-time home owners,” he said.

I-Berhad deputy chairman Datuk Eu Hong Chew said he hoped that the Government could extend the existing export promotion incentives for manufactured and agricultural products to the property market. 

“This is especially so for developers who believe in branding and promotion. The international branding programme is not so much to attract foreign buyers but is important in drawing potential joint venture partners.” - The Star