Malaysia next year levy of consumption tax will push up house prices
Date：2014/06/20
[UDN.com]
The Malaysian government announced in Budget 2014, 將在2015年4月1日生效6%消費稅。6% of GST will take effect in April 1, 2015.
Chief Executive Officer of TW House International Property Sdn Bhd Mr. Jeff Fang reminded, fueled of consumption tax is bound to push up Malaysia real estate prices; Therefore, is good time to invest in real estate market before levy of consumption tax.
Mr. Jeff Fang explained that although real estate is exempt from consumption tax, but the main construction material such as cement and steel are still tax levied. Developers will certainly reflected the cost into housing price.
He pointed out that the Malaysia government requires developer to provide low-cost housing even though construction price is higher. If building materials be implemented of consumption tax, developer for sure will passed on the cost to others non-subsidize house. In the other words, these non-subsidized real estate price will rise for more than 6%.
It is worth noting that, Malaysia government objective to being one of the World Bank definition of ‘high-income country’ in year 2020. Therefore, implementation of the "minimum wage" system since January 2014, hope of improving income levels, narrowing the wealth gap, and adjusted every two year. In other words, the Malaysia real estate developers in addition to facing the rising for land and material cost, but also burden of increasing labor costs. ‘Only rising and not fall’ in future real estate market.
According to TW House International Property research center analysis, capital Kuala Lumpur’s property price rose caused by the strong demand. Compare for property value for year 2013 to 2009, there was growth of at least 40%-50%, amazing value added. Mr. Jeff Fang believes that before the introduction of consumption tax is the good time for investor to step into Malaysia real estate market.