KUCHING: The Sarawak Housing and Real Estate Developers’ Association (SHEDA) hopes the government and property developers will have continuous mutually beneficial discussions on the Goods and Services Tax (GST) to find a solution to both benefit the state and country.
This was among the key notes of its second seminar on GST held in collaboration with IFCA MSC Bhd after receiving overwhelming response from the first one in June. Guest facilitator for the event was Daniel Chow, chief financial officer of IFCA MSC.
According to Sheda secretary general,Sim Kiang Cheok, this seminar is different from most GST seminars in the market as it has been “tailored specifically” with property developers in mind.
“As such, the topics and case studies discussed these two days are unique to our industry,” he said.
Attendees for the event were mostly property developers and companies involved in construction but there were also members of the legal fraternity as well as accounting professions at the event as well.
Sim noted that the GST will be implemented in less than six months and developers need to be prepared for the inevitable changes and impact GST will have on our businesses and the economy.
“Developers and speculators are often accused of tactics to scare buyers into purchasing properties. Some are of the view that the market is being driven artificially by parties who want to take advantage of an increase in demand.
“The demand is certainly there, but it is by no means artificial or created by developers,” he stressed.
Sim explained that population growth is approximately rising at 2.2 per cent per annum.
In addition, it is anticipated that the urban to rural ratio will increase from 50:50 to 70:30 within the next decade. Based on those figures on the projected growth of Sarawak’s urban population, Sim said that “It is safe to say that current supply has not yet overtaken demand.”
Sheda had previously appealed to the government for building materials such as cement, bricks, and steel bars to be zero-rated from GST.
The association, along with the Real Estate and Housing Developers Association Malaysia (Rehda) had also asked for residential houses priced up to RM500,000 to be added as zero-rated items instead of being GST-exempt.
“However, in Budget 2015, the government did not list building materials that currently do not attract sales and services tax as GST zero-rated items meaning that materials procured from suppliers will be subjected to GST.
“Although it is true that we cannot tell for certain what the impact of GST will have on the property industry, as developers, it is anticipated that added costs will unfortunately affect selling prices,” said Sim.
Rehda recently said it anticipated an increase of 2.6 per cent on house properties compared with the Customs Department’s predictions of impact of less than two per cent.
Sim also noted that the government has introduced favourable policies and incentives for the rakyat in the Budget 2015 including the youth housing scheme, raising the ceiling household income for PR1MA home to RM10,000 and the extention of 50 per cent stamp duty on instruments of transfer and loan agreements until December 31, 2016.
“The real extent of the effect of GST implementation is still uncertain. Different parties will have different views on the implementation and treatment of GST.
“However, it is SHEDA’s hope that the developers and the government will continue to engage in mutually beneficial discussions to find a solution that will benefit our state and country.”