5 Quick Property Tips for 2019 in Malaysia

The latest Budget 2019 announced by the Malaysian government saw the introduction of several new housing allowances – many of which left the average Malaysian cheering “YAY!”

Not surprising, seeing as the overall thrust of the policies was to help more Malaysians own a home affordably. So if you’re in a position to consider buying a property, how can you leverage on the recent announcements?

Here are five easy key takeaway points to chew on:

1. You have six months to enjoy a minimum 10% discount from developers for overhang properties!

For a limited time of only six months starting 1 January 2019, the government will waive all stamp duty charges for first-time purchases of homes valued between RM300,001 and RM1 million.

This is in line with the National Home Ownership Campaign, where in return, developers will offer a minimum price discount of 10% for these residential properties. In case you’re wondering, an overhang property is defined as a completed unit that remains unsold after a period of nine months.

What does this mean to you?

If you’ve been contemplating buying a house, this is your chance!

It’s not always an easy feat though, but the Bear has got you covered with your basics on first-time homeownership. You only have six months to sign your Sale & Purchase Agreement (SPA) though, so if you’re keen and ready to start looking, a great platform to refer to is Mudah Property. The platform offers a wide range of low-cost to luxury properties, with prices varying below RM100,000 to the millions.

2. Luxury homes beware! Only low-cost homes now enjoy RPG Tax exemption

The Real Property Gains Tax (RPGT) rates will be revised for disposals of properties or shares in property holding companies after the fifth year.

For Malaysian individuals, the rate shall be increased from 0% to 5%. However, low cost, low-medium cost and affordable housing with prices below RM200,000 will be exempted.

What does this mean to you?

This new 5% rate applies to properties sold from 1 January 2019 onwards, so if you’re in the process of signing your Sale & Purchase Agreement – you have exactly 11 days to sign it before the tax comes into effect!

Additionally, if you’re looking at purchasing a property to earn capital gains (to buy and sell it after its price has appreciated) or if you’re thinking of upgrading your home after a few years – you can consider purchasing a low-cost home below RM200,000 to be eligible for the RPGT exemption.

If you’re stuck wondering what RPGT is, check out KC Lau’s handy explanations here.

3. Thinking of selling, buying, gifting, loaning a low-cost house? Enjoy up to RM5,000 exemption on stamp duty for two years

For first-time home-buyers purchasing residential properties priced up to RM500,000, the Government will exempt stamp duty on the instrument of transfer and loan agreement up to RM300,000 on sale and purchase agreements as well as loan agreements for a period of two years until December 2020.

What does this mean to you?

An instrument of transfer is essentially the contract that relates to your transaction (selling, purchasing, gifting of a property). Stamp duty on this transfer is one of the additional legal fee costs that you will have to incur as a transferee in Malaysia (other costs include professional fees, disbursement fees, and more).

With this new policy however, first time home-buyers will enjoy an exemption of up to RM5,000 on the quotation for houses priced up to RM500,000. For further information on stamp duty calculation, the Malaysian Housing Loan website hosts a detailed step-by-step guide.

4. Take advantage of the home-buying schemes out there!

The government has allocated nearly RM1.5 billion for Program Perumahan Rakyat (PPR), Perumahan Penjawat Awam Malaysia (PPAM), PR1MA and Syarikat Perumahan Nasional Bhd to ensure the availability of housing supply.

What does this mean to you?

With the exception of Perumahan Penjawat Awam Malaysia (PPAM) – which is a scheme specifically tailored for governments servants, the housing schemes mentioned above are open to all Malaysian first time home-buyers, conditional upon their income category in society.

There are also additional schemes you can look out for, such as MyHome, or geographic-centric schemes, such as Rumah Selangorku, which helps you own a home within Selangor state.

5. Do you belong in the lower income groups? Housing loan options will be widened

For lower income groups earning not more than RM2,300 per month, a fund amounting to RM1 billion will be established by Bank Negara Malaysia, to help you purchase affordable homes priced up to RM150,000.

The fund for home loans will be made available from 1 January 2019 at participating financial institutions, namely AmBank, CIMB, Maybank, RHB and BSN through a concessionary financing rate as low as only 3.5% per annum.

House prices has largely outpaced income level growth resulting in a severe mismatch when it comes to home ownership amongst Malaysians. Not only are those in the low-income groups struggling affected, but the escalating cost of living also means that young, first-time buyers find it tough to find a house within their personal budgets.

Potential home buyers will need to get their homework started as this benefit will only be valid for a duration of two years or until the allocated budget has been thoroughly depleted.

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