Property managers seek SST exemption on commercial property maintenance fees, sinking funds

• MIPFM said it is deeply concerned about the impact of SST on strata commercial property owners and residents, especially with rising living costs.

KUALA LUMPUR (May 7): The Malaysian Institute of Property and Facility Managers (MIPFM) has submitted a formal appeal to the Ministry of Finance (MOF) and the Royal Malaysian Customs Department to reconsider and exempt maintenance fees and sinking fund contributions for stratified commercial properties from sales and service tax (SST), over a year after its implementation.

The Malaysian government began applying SST on sinking fund contributions and maintenance fees from February 2024. Commercial properties face 6% SST on sinking fund contributions and maintenance fees, while residential properties were exempted from SST starting April 1, 2024.

In a statement on Wednesday, MIPFM said it is deeply concerned about the impact of SST on strata commercial property owners and residents, especially with rising living costs.

It said taxing maintenance charges reduces funds for repairs and upkeep of common areas. Including sinking fund contributions as a taxable service goes against its purpose and adds extra financial pressure on homeowners, as these funds are meant for major long-term expenses like lift replacements and building repairs.

“MIPFM strongly believes that this policy is not only inconsistent with the principle of equitable taxation, but it also penalises owners for fulfilling their obligations to maintain and enhance their own properties,” said MIPFM president PMgr Sr Ishak Ismail.

The institute has called for a more holistic and consultative policy approach, involving stakeholders such as registered property managers, Joint Management Bodies (JMB), and Management Corporations (MC), to ensure the sustainability and affordability of property management services in Malaysia.

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