KUCHING: Residential homes will not have Goods and Services Tax (GST) imposed on them.
Housing Minister Datuk Amar Abang Johari Tun Openg, who said this yesterday, made it clear it was imperative to distinguish between commercial and residential buildings.
“Commercial buildings will need to pay GST, but there will be no GST for residential buildings. There will be procedures done by relevant parties, such as the Customs Department, so the houses we sell will not have GST imposed.
“As housing minister, I feel there will not be a severe increase in prices for residential buildings. Even if there is, it will not be that great because you don’t have to pay tax for land.
“In addition, certain building materials do not attract tax. Even if they do, you can claim as input-deduction tax,” he told a press conference after closing the ‘GST in the Housing Sectors’ seminar at Imperial Hotel here.
Abang Johari said GST should also not be imposed on the selling price of a house that is sold.
“People have the misconception that when a house is sold, it will attract sales tax because of the world ‘sell’. That is not the case here. Hence, we have organised this seminar to clear this confusion.
“However, if we study other countries, during the transitional period after GST has been implemented, there might be some adjustment, but it will adjust to normal.”
Abang Johari also urged developers and consultants to engage with the Customs Department to ensure correct information could be conveyed.
“The housing industry involves consultants, engineers, architects, planners, and lawyers. So, if these professionals are in doubt as well, please refer to Customs. As far as I am concerned, we enforce based on the law we have, so we must educate the people on all provisions of the law.
“GST is not a bad system. The current regime of Sales and Service Tax actually allows some people to escape from paying taxes, but with GST they cannot.”
He also said there should only be a minimal impact of not more than three per cent.
“Prices depend on supply and demand. Since GST is new, we need that sort of adjustment range, and based on our calculations, there should not be more than three per cent. After the transitional period, it will be normal again.
“As for how long the transitional period will take, it depends. For example, it took seven to eight months in Australia, so we shall see.”