Works Minister Datuk Seri Alexander Nanta Linggi has indicated that the upcoming expansion of the sales and service tax (SST) is expected to have only a minimal effect on house prices.

Speaking at the launch of the 27th International Surveyors Congress on Thursday, he noted that the government has taken a calibrated approach to the tax adjustments, with measures in place to shield the housing sector from significant cost increases. 

“Despite concerns over rising costs, the SST expansion will have a limited impact on [price] growth. Our transitional measures are designed to preserve momentum while ensuring a fairer and more sustainable tax system,” he told reporters.

To facilitate the transition, Nanta announced a 12-month tax exemption for non-renewable contracts, allowing contractors adequate time to reassess pricing structures and adjust project scopes accordingly. Additionally, he confirmed that exemptions on certain transactions would be applied to prevent instances of double taxation.

He also reaffirmed that SST will not be imposed on key construction materials, which remain taxed at 0%, thereby helping to keep fundamental building supplies within reach.

It was recently confirmed that under the revised SST framework, which comes into effect on 1 July, public and residential housing developments will be exempted. This measure is designed to manage cost escalation and support housing affordability amid ongoing economic challenges.

(Source: The Edge)

• TAGS:
• Construction
• Datuk Seri Alexander Nanta Linggi
• House Prices
• Sales and Service Tax
• SST
• Tax Exemption