KUALA LUMPUR, Oct 29 — The government has agreed to continue the passenger vehicle sales tax (SST) exemption until June next year to encourage buyers.

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said the exemption will now also cover completely knocked down (CKD) as well as completely built up (CBU) multi-purpose vehicle (MPV) and sports utility vehicles (SUV).

"For CKD, 100 per cent exemptions are given while 50 per cent exemptions are given to CBUs including for MPVs and SUVs,” he said when tabling Budget 2022 in Parliament today.

The SST exemption was introduced on June 15, 2020 under the Penjana programme and had been scheduled to end last December 31 but has been extended to the same date this year.

The exemption was meant to spur demand within the local automotive market.

The sales tax exemption has resulted in reduced prices for passenger cars, although pick-up trucks are not eligible as they are classified as commercial vehicles.

In another matter, Tengku Zafrul also announced government will no longer impose the Real Property Gains Tax (RPGT) for disposals by individual citizens, permanent residents and companies from the sixth year of onwards.

This was among requests from property groups that asked for incentives to spur the industry.

Tengku Zafrul also said the government will continue building affordable homes for low-income groups, with an allocation of RM1.5 billion.