In Malaysia, the average and low-income earners may find it a bit difficult to buy a home of their choice. The main challenge is usually the high, compulsory, upfront payment, and the life-long mortgage commitment that is required.
Apart from the freebies and promotional offers from property developers in Penang
, the government has come up with several grants and incentives to help Malaysians.
Mainly, low and average income earners and first-time home buyers
. Some of those grants and incentives include stamp duty exemptions, deposit assistance, and low-interest rate loan.
Let's talk about these grants and incentives for first-time homeowners
Stamp Duty Exemptions
The following are the features of stamp duty exemptions:
- You're qualified for stamp duty exemption on the instrument of transfer and loan agreement for transactions (sales and purchases) made between Jan 1, 2019, to Dec 31, 2020, for houses priced up to RM300, 000.
- If the price of the home is above RM300, 000, the stamp duty exemption on the instrument of transfer and loan agreement applies only to the first RM300, 000 and for SPA done between July 1, 2019, to Dec 31, 2020.
- First-time homebuyers who are looking to buy a home valued between RM300, 000 to RM1 million, stamp duty exemption applies to the instrument of transfer for the purchase of homes. However, this offer started and ended from Jan 1 to June 30, 2019.
- You get a waiver of stamp duties on instruments of transfer for the purchase of a Penang residential property valued up to RM1 million, as well as for loan agreements of up to RM2.5 million, that comes under the six-month National Home Ownership Campaign 2019
Youth Housing Scheme
The following are the features of the Youth Housing Scheme
- It provides a 100% loan to single or married youths to own their first home
- The scheme is only open for the purchase of properties worth between RM100,000 and RM500,000
- The scheme is only open to 20,000 buyers. And it is handled on a “first come, first served” basis. Borrowers are entitled to the monthly financial assistance of RM200 for the first two years
- Borrowers are also entitled to 100% stamp duty exemption if they decide to transfer ownership and the facility documents for properties priced up to RM300,000
- The maximum financing tenure is 35 years if borrower’s age does not exceed 65 years at the end of the tenure.
- The loan is only for Malaysian citizens aged between 25 and 40 years. Also, they must be a first-time homebuyer with a household income of no more than RM10,000 per month.
First Home Deposit Funding Scheme (MyDeposit)
The features of this scheme include:
- The project helps first-time homebuyers by settling the initial deposit for a home, usually, 10% of the value of the home, or a maximum of RM30,000 per unit for private housing. It also applies to house projects on the secondary market, priced RM500,000 and below.
- In this scheme, you are not allowed to sell the house for at least a period of 10 years.
- You're not allowed to rent out the house.
- The scheme is only for Malaysian citizens who are 21 years and above. It is also open to first-time homebuyers with a household income of between RM3,000 and RM15 000 a month.
Bank Negara Malaysia’s Fund For Affordable Homes
Bank Negara has set down a loan of RM1 billion to assist first-time homeowners among the low-income earners. The investment will support the low-income earners to buy affordable homes priced at RM150,000 and below.
The following are the features of Bank Negara's loan:
- The maximum financing rate is 3.5% per annum
- The maximum loan tenure is 40 years or up to 70 years of the applicant’s age, whichever is shorter
- The only participating financial institutions are: AmBank, Bank Simpanan Nasional, CIMB Bank, Maybank, and RHB Bank
- The loan is available for two years. The project started Jan 2, 2019, and will run until the RM1 billion is completely exhausted
- The loan is eligible for Malaysian citizens with a maximum monthly household income of RM2,300. They must be salaried workers or self-employed. Also, they must not have any record of impaired financing for the past 12 months.
My First Home Scheme
The features of this scheme include:
- Giving first-time homebuyers access to get 100% financing from eligible banks and financial institutions, enabling the first-time homeowner to buy a home without paying a 10% down payment
- The scheme is limited to Penang residential properties (including the whole of Malaysia) valued between RM100,000 and RM500,000
- The home is for you to live in, and not for any other investment purposes The financing tenure must not exceed 35 years subject to borrower’s age not exceeding 65 years at the end of the financing tenure
- The scheme is open to only Malaysian citizens or employees in the private sector of up to 40 years of age. It is also accessible to the first-time homebuyer with a monthly gross income not exceeding RM5,000 for a single borrower or a monthly gross income not exceeding RM10,000 for joint borrowers (family only)
Buying a house when your income is low can be challenging. Therefore, if you are a first-time house buyer, looking for a residential property in Penang, take advantage of any of these projects built by the government or Penang property developers, as the above projects.