Commercial units to the fore

Posted on Jul 31, 2018

Share to Social Media

Sales and Service Tax will likely boost investor demand for factories and shoplots

DESPITE the government having announced that the Sales and Service Tax (SST) will replace the Goods and Services Tax (GST) in September, investors could look forward to opportunities in the property market.

Total Realty head of marketing Dr Kho Chng Guan said that although the full extent of the new taxation may not be felt as yet, an unexpected segment of the property market could be enticing to investors. That segment covers commercial properties.

“Previously, there was no GST when buying residential properties but professional services such as assigning a lawyer would incur GST.

“Come September, SST will likely be charged even for residential properties.

“The market for commercial properties such as shoplots and factories had been stagnant over the past few years because investors had to pay an extra 6%. For example, if you bought a RM2mil shoplot, you would have paid RM120,000 more.

“We can see why commercial properties were not selling well then. In the near future, I foresee a rise in demand for factories and shoplots,” he said.

Dr Kho believes that with the implementation of SST, businesses will get a new lease of life because the new tax should spur growth for enterprises.

“With SST in place, more people would want to do business because of cost reductions. I also foresee an increased demand for rent and sales.”


On the government’s decision to slash mega projects such as the high-speed rail (HSR), Kho said there are other avenues in the market that would still be suitable for investment.

“If you are keen to invest in property, you should be looking at places that are mature because new infrastructure projects such as the MRT and LRT create opportunities.

“Consider those completed units that are located near to amenities such as public transportation; there’s lots more to invest in,” he said.

Asked which areas would be best for investment, Kho said that both secondary and primary properties have their pros and cons that buyers need to consider.

With experience in the sub-sale market, he said there are advantages that make secondary properties an attractive proposition but it depends on the buyer’s preferences.

“A sub-sale property has its advantages -- you can view it, everything is set in stone, it has already matured or is maturing.

“The problem is that you need to come up with a 10% down payment, legal fees, and perhaps renovation costs.

With plenty of completed units available in the market, developers are offering incentive packages that include rebates, absorption of legal fees, and help with loan application. This is good for the buyer who will be able to save on costs,” he added.


Want to contribute articles to Email

Share to Social Media

Back to top Back to News & Articles page Back to Propwall Homepage

Other Related News

Other Related Videos