All residential stratified properties now ‘GST exempt supply’

Property News/ 21 January 2015 Leave a comment

All residential stratified properties are now categorised as “Goods and Services Tax (GST) exempt supply”, said National Home Buyers Association (HBA) secretary-general Chang Kim Loong.

Previously, only low-cost and low-medium cost properties were granted such exemption.

Being categorised as “GST exempt supply” would mean that fees charged by a management corporation (MC) or joint management body (JMB) for maintenance and management, including a sinking fund, will be exempted from GST.

Chang said a petition was sent to the Finance Ministry on Nov 28 last year, appealing to the government to amend the GST Act 2014 to enable a GST zero-rated tax supply for maintenance charges, sinking fund and all forms of related contributions or charges payable by property owners.

The petition was undersigned by HBA; the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia; Royal Institution of Surveyors Malaysia; and Malaysian Institute of Professional Property Managers, representing six million property owners and occupiers of approximately 15,000 stratified development areas in Peninsular Malaysia.

“From the reply we received from the tax division secretary of the ministry, Datuk Siti Halimah Ismail on Jan 15, it was stated that the appeal for GST zero-rated tax supply cannot be considered for the services rendered by MCs and JMBs to residential parcel owners of stratified properties because the supplies provided by them are deemed as conducting a form of business.”

“However, the ministry is agreeable to widen its GST exempt supply by including all categories of residential stratified properties,” he told a press conference yesterday.

Chang added that amendments will now be made to Paragraph 20, Second Schedule, of the Goods and Services Tax (Exempt Supply) Order 2014.

He pointed out that any fees charged to stratified buildings or parcels that is used for purposes other than residential will still be subjected to GST standard rated tax.

Source: TheSunDaily

  1. Saja Talk
    January 21st, 2015 at 11:36 | #1

    Then this will force JMB to increased the maintenance fees !!!

  2. WF
    January 21st, 2015 at 13:44 | #2

    That means Commercial title condo still subject to GST 6%?

  3. Lousy
    January 21st, 2015 at 19:19 | #3

    Yes, commercial title condo still subjected to GST standard rated tax.

  4. Saja talk
    January 21st, 2015 at 20:50 | #4

    Exempted supply means JMB need to absorb the input tax from the Utilities charges, etc. Therefore, indirectly JMB need to increase the resident monthly maintenance fees.

    Commercial title condo subject to GST standard rated tax means JMB can claim back input tax .

    As a conclusion no different for residential title! no gst but facing the increment of monthly maintenance fees !!

  5. Jack
    January 21st, 2015 at 23:07 | #5

    What about gated & guarded strata title landed properties?

  6. WF
    January 22nd, 2015 at 00:10 | #6

    still a residential…..so i intepret as none

  7. sausage
    January 22nd, 2015 at 10:10 | #7

    Whether standard or exempt from GST, it’s almost the same thing lah. Afterall, if you’re paying RM300/month for maintenance right now, a 6% of that is only RM18/month lah. That works out to be RM0.60 a day. Big deal meh?? MPPP parking -> RM0.40 per half hour, Gurney Plaza parking -> RM2.00 per hour. Teh Ice -> RM1.60 per cup. C’mon, get real my friends.

  8. alibaba
    January 22nd, 2015 at 18:19 | #8

    @Saja talk
    “Commercial title condo subject to GST standard rated tax means JMB can claim back input tax”. Tax for government la not JMB. So commercial or residential still will face incremental monthly maintenance fees. So commercial more worst lol.

  9. hotdog
    January 23rd, 2015 at 14:50 | #9

    @sausage … but but but … management still need to pay utility bills amounting to a few thousands, some even 10k. 6% means $600 more per month, $7.2k per year. This will affect the maintenance fee that you are paying. Get real … why need a hotdog to advise a sausage lol.

  10. SL
    March 10th, 2015 at 11:25 | #10

    Is Sinking Fund of Commercial Title also subject to 6% standard rated tax

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