Malaysia’s property management sector is pushing for tax relief as commercial building owners grapple with new financial burdens. The Malaysian Institute of Property and Facility Managers (MIPFM) has formally requested exemptions from sales and service tax (SST) for maintenance fees and sinking fund contributions in stratified commercial properties, citing concerns about rising operational costs and reduced maintenance budgets.
Since February 2024, commercial properties have faced a 6% SST on these mandatory contributions, while residential properties gained exemption starting April. Industry leaders argue this creates an unfair burden, as sinking funds are specifically reserved for critical long-term repairs like elevator replacements and structural maintenance. The tax implementation effectively reduces available funds for essential building upkeep.
MIPFM president PMgr Sr Ishak Ismail criticized the policy as counterproductive, stating it penalizes property owners for fulfilling their maintenance responsibilities. The organization warns that taxing these contributions contradicts their intended purpose and could lead to deteriorating building conditions as available funds diminish. They emphasize that such financial pressures come at a particularly challenging time with Malaysia’s increasing cost of living.
The institute is advocating for policy reforms developed through stakeholder collaboration, including input from property managers and building management committees. MIPFM believes this approach would better balance fiscal policy with practical property management needs, ensuring sustainable maintenance standards across Malaysia’s commercial real estate sector.