MBAM Welcomes Government’s Revised SST Framework as Positive Move for Construction and Property Sectors

KUALA LUMPUR, Oct 28 — The Master Builders Association Malaysia (MBAM) has commended the government for its latest adjustments to the Sales and Service Tax (SST) policy, describing it as a timely and balanced move that supports both the construction and property development industries.

In a statement released on Tuesday, MBAM said the government’s updated guidelines — issued under Service Tax Policy No. 3/2025 (Amendment No. 1) and Service Tax Policy No. 7/2025 — demonstrate genuine responsiveness to feedback from industry players.

“These new measures show that the government is listening and taking practical steps to maintain stability across the sector,” said MBAM president Oliver Wee, noting that the changes would help reduce ambiguity and promote smoother project execution.

Key Measures Effective July 1, 2025

Starting July 1, 2025, several new provisions will take effect, including:

• A one-year SST exemption for non-reviewable contracts signed before the policy change.

• Clear separation of taxable service components and non-taxable material components in mixed contracts.

• SST exemption for the residential portions of mixed-use development projects.

• A business-to-business (B2B) exemption for consultancy services within single design-and-build contracts, where the tax will now apply only at the main contractor level.

According to MBAM, these refinements offer both immediate relief and long-term clarity to builders, developers, consultants, and other stakeholders involved in construction and property projects.

Industry Impact and Market Outlook

MBAM emphasized that a clearer SST structure is crucial for maintaining cost efficiency and investor confidence, particularly as the construction sector underpins Malaysia’s broader economic growth. The policy revision is also expected to create a more predictable tax environment for developers managing large-scale projects across Kuala Lumpur and Selangor.

In particular, developers handling commercial property in KL, office space in Bukit Jalil, or industrial land in Selangor are likely to benefit from reduced tax uncertainties when planning new projects. Similarly, builders of factories in Puchong or industrial property in the Subang area could see smoother cost forecasting and improved project feasibility under the clarified tax structure.

Continued Collaboration for Vision 2030

MBAM reaffirmed its commitment to ongoing engagement with the Ministry of Finance and the Royal Malaysian Customs Department, saying that continuous dialogue will help further refine the SST framework as Malaysia progresses toward its Vision 2030 development goals.

“The new SST policies mark a step in the right direction. They bring clarity, fairness, and stability to the industry — essential foundations for sustainable growth,” the association said.

With a more transparent tax framework now in motion, Malaysia’s construction and property markets — from industrial parks in Selangor to urban commercial zones in KL — are expected to gain stronger momentum as investors and developers plan their next phase of expansion.