PETALING JAYA (April 25): Deputy president of the Real Estate and Housing Developers’ Association (REHDA) Malaysia Datuk Soam Heng Choon (pictured), has cleared the air for property purchasers, stating that while the rules surrounding Goods and Services Tax (GST) are still vague for most people, it will bode well for buyers to download the regulation manual and understand it.
“The penalties surrounding GST are real and it is important for people to know what they are,” he said today at The Edge Investment Forum on Real Estate 2015. Soam was one of three panelists covering the topic of “Post-GST –The Real Impact on Buyers”.
He explained that the penalty for the general offence pertaining GST is two years of imprisonment with a fine of RM30,000; incorrect submission is three years of imprisonment and a fine of RM50,000; and for evasion it is seven years in prison.
Touching on the topic of the impact of GST, Soam said: “The tax will of course add to the government’s funds and we [the developers] expect the government to reduce the corporate and personal income tax in the next few years.”
Soam also said that while developers cannot claim the input tax for residential properties, developers are of course subtly raising the prices of their products; it is just that buyers are unaware of it.
“The materials that we use have been charged with GST, which indirectly inflate the cost of supply. This we cannot pass on to the buyers so, one of the ways is that the developers would have adjusted their prices.”
However he stressed that even though there is a lot of supply, if there is no demand, developers cannot increase the price.
He concluded that developers will need to apportion what goes into their commercial and residential products.
“If the developers are found to be doing something wrong, then definitely we will be penalised.”
For the full details of The Edge Investment Forum on Real Estate 2015, read the May 4 issue of City&Country, the property pullout of The Edge Malaysia.
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