Posted on 12 November 2013 - 11:17pm
Last updated on 13 November 2013 - 09:57am
GEORGE TOWN (Nov 12, 2013): House prices are expected to increase between 5% and 10% when the goods and services tax (GST) is implemented in 2015 despite residential units being exempted from the tax.
Penang Real Estate and Housing Developers Association (Rehda) chairman Datuk Jerry Chan said the rise was certain.
He said this could happen as contractors who did not set up a system to claim back the tax will pass on the costs to the developers who in turn will pass the costs on to the end-users.
He said contractors who bought GST-imposed raw materials cannot be forced to claim back the tax in order for consumers to enjoy the savings.
"If the contractors do not claim, the costs will be passed to the developers and then on to the buyers," he said today after attending a roundtable discussion on the impact of Budget 2014 organised by Henry Butcher Malaysia (Penang) and moderated by its director Dr Jason Teoh.
Under the new tax, residential units are tax-exempted, meaning buyers will not have to pay GST on their purchases.
However, certain raw materials for construction have GST imposed on them and the costs may be passed on to the consumer if the tax is not claimed back from the government.