Projects under construction will be valued as of March 31, 2015 and GST will be levied on the uncompleted portion of the project.
For example, a project that is 40 per cent complete on March 31 will see GST imposed on the remaining 60 per cent.
"The bearer of this tax will depend on the agreement between the contractor and the developer, and between the developer and the buyer," said BDO Malaysia advisory executive director Mok Chew Yin at StarLive, a monthly talk by industry experts and columnists hosted by Star Publications (M) Bhd.
Mok said if there was no provision in the agreement for such a tax to be passed on to the buyer, the developer would have to absorb it.
"Ultimately, the implementation of GST is likely to bring about a slight increase to residential property prices in general - perhaps 2 per cent to 3 per cent by my estimation - as developers would not be able to claim input tax as sale of residential properties is exempted.
"The increased cost will either be passed on to buyers or absorbed by the developer or shared, but it wouldn't be as high as 6 per cent," he said.
However, BDO tax/GST executive director Jeff O'Connell said GST would actually lower costs to businesses in some instances as GST input tax could be claimed, unlike the sales and services tax, which was not claimable.
"The Price Control and Anti-Profiteering Act is in place to safeguard against profiteering from the implementation of GST," O'Connell said, adding that Australia's experience when it introduced GST at 10 per cent bore repeating.
"In Australia, where pricing was monitored for 12 months before GST was implemented and up to two years after, we received 51,000 complaints, underwent 7,000 investigations and 11 prosecutions, and returned A$21mil (RM61.7mil) to two million customers," said O'Connell.
"Between May 2000 and May 2001, we experienced an average (upward) price change of 2.6 per cent when GST was introduced," he said. -Asiaone
