The upcoming revision and growth of Malaysia’s Gross sales and Service Tax (SST), efficient July 1, 2025, is predicted to have minimal influence on the residential housing sector. Based on RHB Funding Financial institution Bhd, contractors centered on residential tasks, reminiscent of MGB Bhd and Kerjaya Prospek Group Bhd, will stay largely unaffected.
The revised SST introduces a 6% providers tax on development providers, relevant to contractors with annual income exceeding RM1.5 million. Nevertheless, residential and public housing tasks are exempt, together with primary development supplies and sure business-to-business transactions, avoiding double taxation.
Conversely, contractors engaged in business, industrial, and infrastructure tasks — together with companies like Sunway Development Group, Gamuda Bhd, and IJM Company — shall be topic to the tax. These contractors might have to issue within the tax when bidding for brand new tasks or renegotiate phrases for ongoing contracts.
Regardless of considerations, the broader development sector outlook stays constructive. The continued exemption for residential tasks helps guarantee housing affordability stays comparatively secure. Furthermore, knowledge centre developments — a key progress driver — are anticipated to proceed, even with the extra tax value. For instance, a 6% providers tax on a RM1 billion knowledge centre undertaking would translate to RM60 million, a marginal determine for international tech companies like Google and Microsoft.
RHB maintains its “Chubby” stance on the development sector, citing resilience in key areas and strategic exemptions that cushion the influence on important housing and infrastructure. Total, whereas the revised SST introduces increased tax publicity in some segments, the residential housing market is predicted to stay insulated.
