Kuala Lumpur: Residential properties sold under the Housing Development Act (HDA) will be exempted from the updated Sales and Services Tax (SST), following concerns from the construction industry over rising costs. Housing and Local Government Minister Nga Kor Ming stated that the exemption applies to all residential buildings, including serviced apartments built on commercial land, provided they are intended for residential use and fall under the HDA.

According to BERNAMA News Agency, this announcement came after discussions between Nga and Finance Minister II, Datuk Seri Amir Hamzah Azizan, in response to industry players' concerns about the impact of cascading taxes under the revised SST framework. Nga mentioned that the issue will be addressed through business-to-business (B2B) exemptions, ensuring that the service tax is only applied at a single stage.

The Finance Ministry clarified that basic construction materials such as cement, sand, and aggregates will continue to be taxed at 0 per cent. Of the 400 tariff codes covering building materials, only eight will see an increase, affecting items such as laminated glass, netting, and vats. Nga highlighted that this change will impact only two per cent of the total building material tariff codes.

Moreover, Nga added that contractors might separate material costs from service charges, allowing the service tax to apply solely to construction services. He emphasized the government's commitment to balancing fiscal reforms with housing affordability. Nga assured that the Housing and Local Government Ministry (KPKT) will continue to engage with the Finance Ministry and stakeholders to ensure fair implementation of tax policies and protect the interests of homebuyers.