SHAH ALAM, 16 June: The prices of houses are expected to increase even though the real estate sector is exempt from the Goods and Services Tax (GST) when it comes into effect in April 2015.

The rising real estate prices is expected to occur when building materials are not included in the list of 40 goods that are not subject to the GST.

The Executive Councillor in charge of Housing, Iskandar Abdul Samad (PAS-Chempaka), said that the State Government will apply for a full tax relief on materials in the construction industry, especially goods in the category of price-controlled goods, to overcome this matter.

“Revisions on the prices of taxable goods have found that construction materials are not exempt from the GST and this will indirectly affect the prices of houses.

“What the State Government can do is to apply for a tax relief on the price of goods in the housing construction industry, especially those involving price-controlled goods.

“This is because since January 1, the State Government first introduced the Affordable Housing Policy (Selangorku Homes) where the selling price of affordable homes is fixed between RM42,000 to RM250,000, depending on the size of building, type of house and location,” he said when answering a question from the Assemblyman of Batu Caves, Amiruddin Shari (PKR).

He said that developers must comply with the price control set, whether or not the GST has an impact on future increases in setting the prices of houses.

NS