Incentives for homebuyers

For most Malaysians, buying a house is tough. A high upfront payment coupled with a life-long mortgage commitment can be daunting, so it makes sense to take any help you can get to lower the cost of owning a home. Besides the many freebies and promotional packages that property developers are offering, the government has come up with several incentives to assist the rakyat, especially the lower income group and first-time homebuyers, such as stamp duty exemptions, deposit assistance and low-interest rate loans. Here are some of them.

Stamp duty exemptions 

• Stamp duty exemption on the instrument of transfer and loan agreement for sales and purchase executed between Jan 1, 2019 to Dec 31, 2020 for homes priced up to RM300,000
• For homes priced between RM300,001 to RM500,000, the stamp duty exemption on the instrument of transfer and loan agreement is limited to the first RM300,000 and only for SPA completed between July 1, 2019 to Dec 31, 2020
• For first-time homebuyers who are purchasing homes priced between RM300,000 to RM1 million, stamp duty is exempted on the instrument of transfer for the purchase of homes from Jan 1 to June 30, 2019
• Waiver of stamp duties on instruments of transfer for purchase of residential properties priced up to RM1 million and for loan agreements of up to RM2.5 million, that come under the six-month National Home Ownership Campaign 2019 (HOC 2019) which runs till June 2019

Youth Housing Scheme

• The scheme offers a 100% loan to single or married youths to own their first home
• Only eligible for the purchase of properties worth between RM100,000 and RM500,000
• Limited to 20,000 buyers on a “first come, first served” basis
• Monthly financial assistance of RM200 to borrowers for the first two years
• 100% stamp duty exemption on the transfer of ownership and facility documents for properties priced up to RM300,000
• Maximum financing tenure is 35 years provided the borrower’s age does not exceed 65 years at the end of the tenure
• Eligible for Malaysian citizens aged between 25 and 40 years old; first-time homebuyer with a household income of no more than RM10,000 per month

First Home Deposit Funding Scheme (MyDeposit)

• The scheme assists first-time homebuyers in paying the deposit for a home amounting to 10% of purchase price or a maximum of RM30,000 per unit for private housing and housing projects on the secondary market priced RM500,000 and below
• The house is not allowed to be sold for a period of 10 years
• The owner is not allowed to rent out the house, but use it for own stay only
• Eligible for Malaysian citizens aged 21 and above; first-time homebuyer with a household income of between RM3,000 and RM15,000 a month

Bank Negara Malaysia’s Fund For Affordable Homes

• •An RM1 billion fund established by Bank Negara (BNM) to assist first-time homeownership  among the lower income group to purchase affordable homes that are priced at RM150,000 and below in the primary market
• Maximum financing rate is 3.5% per annum
• Maximum loan tenure is 40 years or up to 70 years of the applicant’s age, whichever is shorter
• Participating financial institutions: AmBank, Bank Simpanan Nasional, CIMB Bank, Maybank and RHB Bank
• Available for two years starting Jan 2, 2019, or until the RM1 billion is fully utilised
• Eligible for Malaysian citizens with a maximum monthly household income of RM2,300; must be salaried workers or self-employed and do not have any record of impaired financing for the past 12 months

My First Home Scheme

• Allows first-time homebuyers to obtain 100% financing from a panel of banks and financial institutions, enabling them to own a home without paying a 10% down payment
• Limited to residential properties valued between RM100,000 and RM500,000
• The home must be for owner-occupation, not for any other investment purposes
• Financing tenure must not exceed 35 years subject to borrower’s age not exceeding 65 years at the end of the financing tenure
• Eligible for Malaysian citizens or employees in the private sector of up to 40 years of age; first-time homebuyer with a monthly gross income not exceeding RM5,000 if single borrower or a monthly gross income not exceeding RM10,000 if joint borrower (family only)

​Mortgage guarantee

For first-time homebuyers with a household income of up to RM5,000 per month, the government will allocate RM25 million to Cagamas Bhd to provide mortgage guarantee facility under the My First Home Scheme for loans by participating banks, which will allow eligible borrowers to obtain 100% financing or more, subject to fulfilling the scheme's criteria.

This story first appeared in the EdgeProp.my pullout on March 1, 2019. You can access back issues here.