In a move to safeguard housing affordability, Malaysia has announced that all residential properties governed by the Housing Development Act (HDA) will be excluded from the updated Sales and Services Tax (SST). The decision comes after extensive consultations between the Housing and Local Government Ministry and industry stakeholders, who warned of potential cost escalations under the revised tax framework.
Minister Nga Kor Ming confirmed the exemption applies to all residential units, including serviced apartments on commercial land, as long as they are designated for housing purposes. The government has also introduced business-to-business exemptions to prevent multiple tax layers, ensuring the service tax is levied only once in the supply chain.
Key construction materials like cement and sand will remain untaxed, with only a minimal number of building components—eight out of 400 tariff codes—facing increased rates. These adjustments target niche items such as laminated glass and specialized containers, impacting just 2% of total material classifications. Contractors will also have the flexibility to itemize service charges separately from material costs.
The Finance Ministry emphasized that the policy aims to balance revenue generation with housing market stability. Nga reiterated the government’s commitment to ongoing dialogue with industry players to refine tax implementation while protecting homebuyers. This exemption underscores efforts to mitigate financial pressures on both developers and prospective homeowners.