Update on GST and commercial property in Malaysia

Do you know that you need to register for GST when investing in commercial property? It is a crucial step in your investment roadmap. However, some investors might forget to include GST into their budget and this is a big mistake- because the figures involved can be significant. In Malaysia, the sale of commercial properties (including land zoned for commercial purposes) is usually subject to 6% GST.

Many thought that private properties would fall outside of this category. In other words, non-commercial properties are not subject to the 6% GST. However, according to the guidance released by the authorities, the facts show otherwise. The recent guidance shows that if an individual owns more than two commercial properties, more than one acre of commercial land or commercial property, or land with a market value of more than RM2mil and has an intention to sell, they are considered to be in business.

If you are buying a property, there are a number of specific conditions to adhere to if you want to be eligible to claim back GST. Also, there are some circumstances determine whether you are liable to pay GST when selling a property, and how the tax will be calculated if you are.

Update on GST and commercial property in Malaysia