THE volume of property transactions in the country for 2018 is expected to increase due to the improvement in spending power arising from the zerorisation of the goods and services tax (GST).
KPMG Head (North) Dato’ Ooi Kok Seng tells StarBizWeek that the middle-class earners will increase their purchasing power by 2% to 4% following the zero-rating of goods and services tax (GST) effective June 1.
Household essentials, lifestyle goods and services, RON97 petrol, and utility bills, are some of the items subject to GST. According to Ooi, house buyers can also expect a possible reduction in the selling price of new residential properties.
“The cost of construction will go down with the zero-rating of GST for building materials and construction services.
"Although the sales and services tax (SST) will come in, the SST essentially is still a narrow based one tier tax system that covers certain raw materials.
"The lower construction cost could lead to a possible reduction in selling prices, boosting the demand for residential properties.
"The buyers of commercial properties who are currently paying 6% GST will benefit from the zero-rating of GST.
"However, developers will experience some escalation in cost once the SST is introduced. Unlike the GST, the SST cannot be claimed back," Ooi says.
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