Residential property is exempted from GST.

Also, GST is the buyer pay one, not seller.

Correct me if I'm wrong. BLR is set by BNM, banks play around with (minus) spread.

But if BR and (plus) spread are up for the bank to decide? Both of it?

BLR was originally set by BNM but banks were later given the rights to decide on their own. BR is also up to the banks to decide.

My assumptions since BNM says it is more transparency for all other banks. Correct me if im wrong.

The BR for all bank is different becuz the 'cost' is different for each bank to do their biz under BNM.
So u probably can get the lowest interest rate for your loan with the bank of lowest BR. Which means ppl will tend to look for bank with lowest BR.

It increase the competition between each bank.

The more transparent just mean you no longer need to window shopping and inquire how much negative spread each bank is given. It all shown in the BR rate. Before BR you only know BLR is 6.6% but the minus spread is upon negotiation with the respective bank, so you won't know the minimum "base" rate you are going to get, since BLR only change in longer interval compared to bank changing their minus spread. Hence when you negotiate with banks, you won't know how much negative spread is determined by market force, and how much is due to your own credit risk. It will be able to "see" after base rate introduce and what you negotiate with banks is purely your own credit risk, and thus greater transparency. The banks can't tell you: oh, the negative spread offered is different because its how the market is, not your credit issue.

On the same note, should one buy a residential property after GST implemented, need to pay tax or exempted.

I think there is still a need to shop around after implementation of BR. A low BR doesn't really mean in reality the bank has low cost of fund as that's likely due to differennce in selection of benchmark cost of fund. Negotiation with the bankers on the loan spread is still necessary in order to get the best rate for yourself.
Ideally, under risk-informed pricing, borrower with high credit risk is supposed to be charged with higher interest. However, under competitive environment, I believe that ultimately the rate offered by the banks will be pretty much close.

Residential are exempted from GST, however, some of the materials used during the constructions may be charged GST by the supplier, so there might be chances where developer increases final selling price to adjust to the extra cost incurred.

Here's an article which illustrates the differences: http://loanstreet.com.my/learning-centre/H...Property-Market

Hi all, just got news that the property bank rates is determined by the bank itself and therefore it have a very different rate for each bank. + how much would very much be depend on your credibility.

On another issue I heard from my father in law that last time he purchased a house and I think at the rate of blr-2.2 I think. But after a few years the bank changed the rate to blr -1 or something like that. According to him it was stated in the bank agreement that the bank reserve the rights to change as and when they see fit. I Am not sure if anyone come across this. But banks are usually blood sucker and I would think they would want to benefit from the this new ruling (by adding some interest to it).

I attended a talk from some gst expert. What they said was just surface infor correct me if I am wrong. He mentioned that GST would depend very much if you are a registrant or not. If you are not a registrant the other person don't need to pay tax. But if A registrant deals with another registrant then it would be subjected to GST on the property pricing. It doesn't matter if it is a commercial or residential.

Yup, you are right. If both are not registrants, they indeed cannot charge GST as they are not eligible to collect taxes.

However, if one is registrant, he have to charge GST to the next-level, regardless if the next-level is a registrant or not (except for zero-rated goods or exempted supplies).

If one is not registrant, he is not entitled to claim input tax charged by his supplier (if the supplier is GST registrant and charges him GST). Note that my example belows are the cost of construction or materials, not the final property itself. The final property cannot be charged with GST (exempted supplies)

However, in residential case, I believe there will be no differences because even if the developer or sub-con is a GST registrant, he will be charged Input Tax (tax charged on him when he purchases raw construction materials / services); but he cannot charge the Tax on the next-consumer (i.e. buyers), as Residential property is exempted from GST.

Here's an illustrated explanation I described above (in the picture, it's in a scenario of Hospital):



So as the developer / sub-con cannot claim the input tax incurred, they may have to indirectly increase the service cost in order to "offset" the "additional costs" incurred in doing his business; because he cannot pass the GST to the final consumer (us)

This post has been edited by polarzbearz: Jan 1 2015, 10:55 PM

Will bank loan subject to GST?

Not that I am aware of, I might be wrong though. Not from banking sector

summoning wild_card_my sifu to answer this

Bank loan is not subjected to GST but bank loan processing and other services such as MEPS provided by bank is subject GST.

Thanks.
But It will b one time pay or each n every bank loan draw down processing subject to GST?

2015 latest rate


This post has been edited by barbar: Jan 4 2015, 06:18 PM

Haha... to complete the list let me help to post another one (which I already shared somewhere else)


Attached thumbnail(s)

Does that mean that getting home loan from public bank is better than others?

If you are fit into the criteria, ie borrower with very good credit profile to borrow a RM350k loan for 30 years - on the surface yes PBB loan is better. But in reality this may not be the case as other banks may be willing to offer a lower loan spread (by lowering profit margin for instance) to win the business.

Does the spread in BLR -x% affected by the credit risk like BR +x%?