Sime Darby Property Cautious on SST Expansion, Keeps RM3.6b Sales Target

KUALA LUMPUR (Aug 22) – Sime Darby Property Bhd said it is monitoring the potential impact of the expanded sales and service tax (SST) on construction services, as the Real Estate and Housing Developers’ Association (Rehda) continues discussions with authorities.

Group managing director Datuk Seri Azmir Merican said clarity is still needed on how the 6% levy, imposed from July 1 on infrastructure, commercial and industrial projects above RM1.5 million annually, will affect developers. Residential projects and fixed-price contracts are exempt for now, but concerns remain that serviced apartments on commercial land may be taxed, raising housing costs.

Sime Darby

“We still need more clarity on how to address it between us and our contractors,” Azmir told reporters at a post-earnings briefing. “Of course, if the 6% rate applies, it will have an impact.”

Despite the uncertainty, Sime Darby Property remains confident of meeting its RM3.6 billion sales target for 2025. For the first half ended June 30, the developer posted RM2.02 billion in sales, with 40% contributed by industrial projects such as Hamilton Nilai City, Serenia Industrial Park, Elmina Business Park and Bandar Bukit Raja. Landed homes accounted for 25%, high-rise residential 22%, commercial 10% and the remainder from non-core land sales.

Business News