Managing a commercial or mixed-use strata property in Malaysia just got a significant regulatory update. On 24 June 2026, the Royal Malaysian Customs Department (RMCD) released Service Tax Policy No 3/2026, bringing highly anticipated relief to Joint Management Bodies (JMBs), Management Corporations (MCs), and developers handling non-residential premises.

If you are currently managing or developing non-residential or mixed-development properties, here is exactly what you need to know about this new policy change.

The Core Update: What Has Changed?

Previously, while residential strata properties enjoyed freedom from service tax on maintenance charges and sinking funds, non-residential properties faced a different, often complex tax reality.

The Minister of Finance has officially stipulated that maintenance or repair services—including maintenance management services for non-residential premises and buildings provided by a JMB or MC—are not a taxable service.

In short: Maintenance charges and sinking fund contributions for BOTH residential and non-residential buildings charged by a JMB or MC to property owners are now not subject to service tax.

4 Crucial Timelines & Details Every JMB/MC Must Know

To ensure your property management operations stay compliant, keep these specific timelines and rules from the policy in mind:

• Effective Date: This exemption officially takes effect on July 1, 2026.
• The Interim Period: While the policy officially changes on July 1, it will technically only become permanent once it is gazetted in the Service Tax Regulations 2018. In the meantime, the Minister of Finance has granted a formal exemption under Section 34(3)(a) and 34(4) of the Service Tax Act 2018 to bridge the gap.
• No Retroactive Exemptions: Any maintenance charges and sinking fund contributions payable up to June 30, 2026, are not exempt. If your JMB/MC has unremitted service tax collected or due from periods prior to July 1, 2026, it must be remitted to the RMCD as per standard law.
• Third-Party Services Are Still Taxable: If your JMB or MC hires a third-party vendor (e.g., an external property management service, cleaning agency, security firm, or MEP contractor) and pays them using the maintenance funds, those third-party services remain subject to service tax as per current legislation.

What This Means for Your Operations

For JMBs and MCs

This is an excellent operational milestone. It removes a major financial friction point with your commercial property owners and simplifies your accounting. You will need to update your invoicing and property management systems ahead of July 1, 2026, to ensure that service tax is no longer automatically applied to non-residential maintenance bills.

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