KUALA LUMPUR: The Real Estate and Housing Developers’ Association (Rehda) and the Master Builders Association Malaysia (MBAM) are calling for measures to ease housing affordability, lower construction costs, and promote sustainable development under the upcoming Budget 2026.
At the same time, Rehda is urging the government to revive the Home Ownership Campaign (HOC) with targeted incentives, including extending it until Dec 31, 2026.
It proposed stamp duty exemptions on the memorandum of transfer for homes priced between RM300,001 and RM1 million, as well as exemptions on loan agreements for houses up to RM2.5 million, to help more Malaysians achieve home ownership.
SST CONCERNS
The association highlighted concerns over the rising cost of doing business, particularly with the six per cent sales and service tax (SST) on construction.
It said taxing both materials and workmanship creates ‘double taxation’, which drives up house prices, and suggested applying an overall three per cent rate on construction costs instead.
On regulatory frameworks, Rehda said the Build-Then-Sell (BTS) model, which is proposed to be mandatory under the 13th Malaysia Plan (13MP), should co-exist with the current Sell-Then-Build (STB) system.
It said that making BTS the sole delivery system could shrink supply, raise prices, and dampen financing appetite among banks.
Under the BTS model, developers would have to bear the full financing burden upfront, making projects riskier and slowing new launches compared to the current STB system, where presales help fund construction.
FUNDING AND FAIRER CONTRACTS
Meanwhile, MBAM president Oliver HC Wee said the government’s plan to reduce the intake of foreign workers from 15 per cent to 10 per cent of the workforce by 2030 under the 13MP would require industry support.
He expressed hope for specific funding under Budget 2026, channelled through government institutions, to help companies transform.
Wee also raised concern over the sudden imposition of the six per cent SST on construction contracts before July 1, 2025, which he said had negatively affected project costs, adding that MBAM has appealed for the tax to take effect only from July 2025 or January 2026 and not be applied retrospectively.
IBS ADOPTION
On the adoption of Industrialised Building System (IBS), he said the government’s plan to build one million affordable homes between 2026 and 2035 offers a chance to expand IBS use.
“The government should take the lead to include IBS in all government projects, instead of only fulfilling the IBS score.
“Our new MBAM building in Putra Heights was completed in six months using IBS, with minimum labour input and few defects,“ he said.
At the same time, Wee also called for amendments to the Construction Industry Payment and Adjudication Act (CIPAA) 2012 to shorten the adjudication process and improve contractors’ cash flow.
He added that wider use of collaborative contracts, such as the CIDB Form of Contract for Building Works (2022), would encourage proactive management and reduce disputes.
IMPROVING ESG ADOPTION
Rehda also called for stronger support for environmental, social and governance (ESG) adoption, urging the government to extend the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) beyond 2026, with broader eligibility to include tenants, building owners and developers.
The association proposed incentives such as reduced development charges or higher plot ratios for developers achieving Gold or Platinum certification, as well as 50 per cent assessment fee rebates for homeowners of green-certified properties during the first three years.
On a similar note, Wee said while sustainable practices are important, compliance costs remain a challenge for contractors, and hopes that the government could provide more funding and time for the industry to transition.
Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, is scheduled to table the Budget 2026 on Oct 10 in the Parliament. – Bernama