When GST is implemented and becomes the law

Property News/ 12 August 2014 Leave a comment

This month, we will explore the effects of the Goods and Services Tax (GST) on various types of properties when it comes into effect next year.

Residential properties will be exempted from GST. Hence, the seller is not allowed to charge GST on the sale, lease and rental of residential properties such as condominiums, link houses, bungalows, serviced apartments, apartments or upper floor units of shophouses which have been approved for dwelling purposes.

GST is standard-rated for commercial properties. The GSTregistered seller charges GST on the sale, lease and rental of commercial properties. This means that the commercial property buyers or investors will pay GST to the GST-registered seller on the purchase of commercial properties such as shops or retail lots, factories, warehouses, hotels and offices.

Only a GST-registered company that sells you the commercial property, such as in the case of a property developer, is allowed to charge you GST.

If you were to buy from a private seller who is not a GST-registered company, the private seller is not allowed to charge you any GST even though he is selling a commercial property to you.

A GST-registered buyer who buys a commercial property and uses the building to run a business selling GST taxable supplies is allowed to claim back on the GST incurred. The GST payable on commercial properties does not become part of his cost of doing business.

The unregistered GST buyer, however, will not be able to claim back GST for the purchase of the commercial property. The GST becomes his cost of investment.

When he sells the property later on, the GST he incurred which he cannot claim back, will likely be included in the subsequent selling price.

The determining of commercial and residential units is subject to the design (before property completion), usage (after property completion), registration with relevant authority or the Sale and Purchase Agreement (SPA). This information is useful to buyers, investors, business owners and property developers of commercial and residential properties as the differentiation of the two type of properties will affect the pricing, upfront investment and GST claim.


Source: StarProperty.my

  1. Ah Chai
    August 12th, 2014 at 14:03 | #1

    GST is coming…lai.. lai ..lai..sapu sapu..sapu property before GST!

  2. Chew
    August 12th, 2014 at 15:02 | #2

    How do we know developers are not included the GST in selling price of residential units? Nowadays all properties are so expensive

  3. Chew
    August 12th, 2014 at 15:13 | #3

    condo in commercial title is it subjected to GST?

  4. Blind in GST
    August 12th, 2014 at 15:23 | #4

    how about sales and buy land? GST how it work? anybody know?

  5. scud
    August 12th, 2014 at 16:21 | #5


    GST is not applicable to residential homes, therefore they cannot bill you for GST when you buy a house from developers. But whether they factor in the additional cost of GST into the selling price, WHO CARES!!??

    Do you actually care when cement is 20% more expensive or cheaper? Do you really care when copper wire is 20% more expensive or cheaper? Do you actually care when paint is 20% more expensive or cheaper? Do you think developers actually price their products based on their actual cost? NO!NO!NO! In Kedah, maybe, but not in Penang. In Penang, developers price their products based on how stoopid the buyers are! Developers like to build a lot when they know buyers are thinking with their backsides, not their brains…:))

  6. thinkeddy
    August 12th, 2014 at 23:31 | #6

    For the residential property, it is not charge GST. But the developer building material they purchase from supplier. Is it supplier charge GST?

  7. Joo Joo
    August 13th, 2014 at 08:55 | #7

    GST = Grow and Share Together

  8. ASP
    August 13th, 2014 at 09:47 | #8

    GST = Government Super Tax

  9. Jack
    August 13th, 2014 at 17:40 | #9

    GST = Government Sucks Tax

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