Developer: SST exemption on building materials positive, but cheaper homes not guaranteed

Danial Dzulkifly
LBS Bina Group managing director Tan Sri Lim Hock San described the SST exemption as 'positive' for developers. ― Picture by Azinuddin Ghazali

KUALA SELANGOR, Aug 18 — Housing developers welcome the sales and services tax (SST) exemption on building materials, but this may not necessarily result in cheaper properties, LBS Bina Group said today.

LBS Bina Group managing director Tan Sri Lim Hock San described the SST exemption as “positive” for developers.

“Although we would like to reduce cost of construction to home buyers, but there are other factors such as land cost and other development cost that need to be considered,’’ he told the press during the launch of the company’s Rentak Perdana housing phase here today.

Last week, the Ministry of Finance announced that the SST would be exempted from building materials such as bricks and cement among others, as one of the means to reduce home prices.

Some parties, however, including the Ministry of Housing and Local Government and the Malaysian Institute of Architects said the tax exemptions might not be enough to reduce home prices, citing land premiums and other compliance charges as other contributing factors.

Lim also said his company had adopted the use of the Industrialised Building System (IBS) and could ensure the quality and affordability of homes it produced.

“One of the many positive effects of IBS is that quality control is assured,’’ he said

When asked on whether the low adoption of IBS by the construction sector was attributed to the system’s high cost, Lim said conventional methods were more costly in the long run.

“The initial cost of IBS might be higher compared to conventional building methods which may be cheaper at the early stage.

“However, conventional building methods low cost can be offset by inconsistent quality of work that is solely dependent on the skill level of workers. This could translate to added cost that you need to fix the inconsistencies,’’ he said.

IBS is a technique of construction where components are manufactured in a controlled environment, either on- or off-site, placed and assembled into construction works.

The technology is reported more efficient and cost effective.

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