Residential Properties Under HDA Exempted from SST, Confirms Minister Nga Kor Ming

Marcus Liew
Jul 17
2 min read

In a major relief for homebuyers and developers, residential properties governed by the Housing Development Act (HDA) will be exempted from the revised Sales and Service Tax (SST) framework, said Housing and Local Government Minister Nga Kor Ming.

The exemption also extends to serviced apartments built on commercial land, provided they are for residential use and fall under HDA provisions.

What the SST Exemption Covers

Minister Nga clarified that:

All residential properties under HDA are not subject to SST
This includes:
- Landed houses
- High-rise apartments
- Serviced apartments on commercial titles (if built for residential purposes)

“This decision addresses concerns from the construction sector about rising costs due to cascading taxes under the updated SST structure,” Nga said.

Clarification on Construction Materials and Services

To further ease concerns:

Basic building materials like cement, sand, and aggregates remain taxed at 0%
Out of 400 building material tariff codes, only eight will see increases — including items like laminated glass, netting, and vats
This represents only 2% of all materials affected

Additionally, contractors can:

Separate material costs from service charges
Apply SST only to construction services, not the full project value

Business-to-Business (B2B) Exemptions in Place

The government will apply B2B exemptions to avoid multiple tax layers within the supply chain. This ensures:

Service tax is only charged once, at the appropriate stage
Homebuyers won’t face cascading cost effects from earlier phases of the project

Balanced Reform: Affordability + Fiscal Sustainability

Minister Nga assured that the government is working to balance fiscal reform efforts with housing affordability:

“KPKT will continue engaging with the Finance Ministry and all stakeholders to ensure tax policies are fair and homebuyers’ interests are protected,” he said.

This follows close consultation with Finance Minister II Datuk Seri Amir Hamzah Azizan and construction industry leaders.

Industry Reaction: Positive Response Expected

The clarification is expected to:

Reassure developers with ongoing residential projects
Maintain confidence in the housing market amid SST concerns
Prevent unnecessary price hikes in the primary residential market

Final Thoughts

The SST exemption for residential properties under the HDA is a critical policy move that protects homebuyers and keeps housing costs stable during a time of economic recalibration.

By ensuring:

Transparent tax implementation
Safeguards against cascading costs
Targeted exemptions

The government signals its continued commitment to housing affordability, even as it pursues broader fiscal reforms.