Rehda seeks GST exemption for affordable housing construction materials

KUALA LUMPUR: The Real Estate and Housing Developers' Association Malaysia (Rehda) has asked the government to exempt the Goods and Services Tax (GST) for affordable housing construction materials in its 2018 budget wish list.
Rehda's president, Datuk Seri FD Iskandar said the tax exemption would encourage more developers to take part in building more affordable houses priced RM500,000 and below.
"With the tax exemption, the building cost will be lower, leading to lower prices of affordable housing," he said at a media luncheon here, today.
Citing the prices of steel and cement as examples, he said not only were the materials taxed but a levy was also imposed on them.
The price of steel, has increased after a new levy was implemented early this year, causing it to rise to about RM2,600 from RM1,800 per tonne.
"Currently, developers have to pay about RM2,600 per tonne for steel and strata development, and more steel is needed compared to landed property.
"This has led to an increase in construction cost and it would be difficult to have more developers building affordable housing as the cost is high," he said.
With the high construction cost, Rehda also asked for the government's assistance to increase the supply of affordable housing by allocating un-utilised state land.
"The government could assist us by providing state land for affordable housing, especially if such land is not used optimally," he said.
However, in order to maintain price caps for the houses, their distribution and resale must be properly controlled so that the benefits would reach the targeted group.
The average cost of building low-cost housing, excluding land cost is RM105,000 for strata and RM75,000 for landed, per unit. — Bernama