KUCHING, Oct 29: Prospective house buyers in Sarawak should not fall for the claims by


developers that property prices would increase following the implementation of


the Goods and Services Tax (GST) come April next year.

Sarawak Housing Minister Datuk Amar Abang Johari Tun Openg today said


that contrary to this claim, buyers would not be burdened by the 6% GST, as


developers would enjoy an input tax deduction for the building materials they


use.

"They have to pay GST for the materials of course.But, at the end of the


(building process) chain, developers can claim the GST back on what they had


purchased," he said when asked to comment on the possibility of panic-buying


for houses following the fear stirred up by developers.

"The price (of houses) cannot be higher than what it is now. At the


moment you are paying 10(% government tax) plus 6(% sales tax). If it (GST) is


(imposed at) 6%, then it should be lower. That's the logic."

Abang Johari said that his ministry will organise a special seminar on


the GST for all housing stakeholders in the state on Jan 20 next year as a


platform to provide a clearer picture on the tax implication.

Meanwhile, he said the state government had in place a mechanism to


flood the housing market, should supply be critically insufficient to meet


demand.

He said his ministry had two subsidiaries, Daya Builders Sdn Bhd and


Mutiara Mortgage and Credit, which could take up the role as housing developers


and finance facilitator respectively.

He said this approach was also taken to create a certain level of


competition with private developers who were profit-driven, in undertaking


housing projects.

"The company (Daya Builders) would not be over-inclined on (making)


profits as its main objective is to provide quality and affordable houses for


the people."

Abang Johari said the Sarawak Housing Development (Control and


Licensing) Ordinance 2013 passed by the State Legislative Assembly in 2013,


would be enforced effective Nov 1 this year.

He said the new law would further enhance the protection of house


purchasers' rights and interests.

"The new regulations will address and consider the current issues facing


the state housing sector, such as mitigating abandoned housing projects."