Malaysia’s property and facility management industry has welcomed the Government’s decision to exempt service tax on service charges and sinking fund contributions for non-residential buildings, describing the move as a timely measure that will reduce operating costs and provide greater financial certainty for businesses.
The exemption, which takes effect on 1 July 2026, removes service tax on service charges and sinking fund contributions for non-residential properties. According to the Malaysian Institute of Property and Facility Managers (MIPFM), the decision addresses long-standing concerns over the financial impact of the tax on commercial property owners, businesses, Joint Management Bodies (JMBs), Management Corporations (MCs) and building occupiers.
MIPFM President PMgr Sr Haji Ishak Ismail welcomed the announcement and expressed appreciation to the Ministry of Finance (MOF) and the Royal Malaysian Customs Department for engaging with industry stakeholders before finalising the policy.
He said the Government’s willingness to listen to industry feedback and introduce a practical solution demonstrates its commitment to evidence-based policymaking through constructive engagement with stakeholders.
Industry Engagement Shaped the Outcome
MIPFM revealed that it actively participated in several rounds of consultation sessions with the Ministry of Finance and the Royal Malaysian Customs Department. During these engagements, the Institute presented the concerns and recommendations of its members and the wider property and facility management industry.
According to Haji Ishak, the exemption highlights the value of ongoing collaboration between policymakers and industry players.
“The exemption is a positive outcome of constructive collaboration between the Government and industry stakeholders. It reflects the importance of continuous dialogue in developing policies that are practical, balanced, and responsive to the needs of the industry while safeguarding the interests of property owners and the public,” he said.
Lower Costs and Greater Certainty for Commercial Property Management
MIPFM believes the exemption will help ease the financial burden of managing stratified non-residential properties. At the same time, it will provide greater certainty for property owners, businesses and management bodies when planning operational and maintenance budgets.
The Institute noted that reducing these additional costs can help improve financial planning for commercial buildings while supporting more efficient property management.
MIPFM Commits to Supporting the Industry
As Malaysia’s leading professional body for the property and facility management profession, MIPFM reaffirmed its commitment to working closely with the Government and relevant agencies to strengthen industry practices, promote sound policies and raise professional standards across the sector.
The Institute also said it will continue updating its members on any implementation guidelines or further clarifications issued by the relevant authorities as the exemption comes into effect.
The latest policy change is expected to benefit a wide range of stakeholders within Malaysia’s commercial property sector. It also reinforces the importance of continuous engagement between government agencies and industry representatives in shaping practical policies that support business operations while maintaining sustainable property management practices.
