First-Time Home Buyer Complete Guide Malaysia 2025
Everything you need to know: RM12.8 billion Housing Credit Guarantee, stamp duty exemption, EPF withdrawal, tax relief, and step-by-step buying process.
Buying your first home in Malaysia in 2025 comes with unprecedented government support. From RM12.8 billion in housing credit guarantees to full stamp duty exemption for properties up to RM500,000, this is an excellent year to become a homeowner. This comprehensive guide walks you through everything you need to know.
2025 Government Schemes for First-Time Buyers
Housing Credit Guarantee Scheme
Amount
RM 12.8 Billion
Beneficiaries
57,000+ first-time buyers
Target/Validity
B40 & M40 income groups
Stamp Duty Exemption (Full)
Amount
100% exemption
Beneficiaries
Properties up to RM 500,000
Target/Validity
Valid until end of 2025
Property Tax Relief
Amount
Up to RM 7,000
Beneficiaries
Properties ≤ RM 500,000
Target/Validity
RM 5,000 for RM 500k-750k
Using EPF (KWSP) for Home Purchase
Malaysians can use their EPF Account 2 savings to finance various home purchase costs. This significantly reduces the upfront cash needed.
Down Payment
Use EPF Account 2 to pay the initial deposit (10% of property price)
Legal Fees
Cover legal fees for Sale & Purchase Agreement and loan documentation
Stamp Duty (if applicable)
For properties above RM 500,000, use EPF to pay remaining stamp duty
Home Renovation
One-time withdrawal for renovation after loan approval (subject to conditions)
Tax Relief for Home Buyers (2025)
| Property Price Range | Tax Relief | Actual Savings |
|---|---|---|
| Property Price ≤ RM 500,000 | Up to RM 7,000 | Save RM 1,750 (25% tax bracket) |
| Property Price RM 500,001 - RM 750,000 | Up to RM 5,000 | Save RM 1,250 (25% tax bracket) |
10-Step Process to Buy Your First Home
Calculate Your Budget
Monthly income RM 4,000 = max property RM 360,000 (using 3x annual income rule). Allocate max 1/3 of income to loan repayment.
Check EPF Savings
Log into i-Akaun to check Account 2 balance. Ensure sufficient for 10% down payment + legal fees (total ~RM 40,000 for RM 350k property).
Get Loan Pre-Approval
Apply for loan pre-approval to know your borrowing limit. Banks check CCRIS/CTOS and calculate Debt Service Ratio (must be <70%).
House Hunting
Visit 10-20 properties in preferred location. Compare prices, amenities, and future development plans. Check property title status (freehold/leasehold).
Make Offer & Pay Booking Fee
Submit Letter of Offer with booking fee (RM 1,000-5,000). Negotiate price if possible. Seller accepts = both parties sign booking receipt.
Sign Sale & Purchase Agreement
Lawyer prepares S&P Agreement. Pay 10% down payment (can use EPF). Sign within 14 days of booking. Agreement is legally binding.
Submit Loan Application
Submit full loan documents to bank. Bank conducts property valuation. Approval takes 7-14 days. Loan offer letter states interest rate and terms.
Sign Loan Agreement
Sign Loan Agreement at bank. Pay stamp duty (0% if ≤RM 500k!) and legal fees. Bank disburses loan to seller upon completion.
Property Handover
Conduct property inspection with developer/seller. Check for defects. Collect keys. Register utilities (water, electricity, internet) under your name.
Start Loan Repayment
Set up auto-debit for monthly installments. NEVER miss payments to maintain good credit score. Claim tax relief when filing income tax.
5 Common Mistakes to Avoid
Buying Maximum Budget
Just because bank approves RM 400k loan does not mean you should borrow that much. Leave buffer for emergencies, maintenance, and future expenses.
Ignoring Hidden Costs
Budget for: legal fees (1-2%), valuation fee (RM 500-2,000), quit rent, assessment tax, insurance, and moving costs. Total can be RM 15,000-30,000!
Not Checking Property Title
Verify ownership at Land Office. Check for encumbrances, caveats, or legal issues. Individual title is better than master title. Lawyer should do this check.
Skipping Property Inspection
Hire professional inspector (RM 500-1,500) for sub-sale properties. Check for water leaks, cracks, electrical issues, pest problems. Saves thousands in future repairs.
Falling for "Low Monthly Payment" Traps
RM 1,200/month x 35 years = RM 504,000 total. RM 1,800/month x 20 years = RM 432,000. The 35-year loan costs RM 72,000 MORE despite lower monthly payment!
Final Checklist
- ✓ Check EPF Account 2 balance sufficient for down payment
- ✓ Get CCRIS/CTOS report to check credit status
- ✓ Calculate monthly income x 33% = maximum affordable monthly payment
- ✓ Budget extra RM 15,000-30,000 for hidden costs
- ✓ Get loan pre-approval before house hunting
- ✓ Hire lawyer to check property title and documentation
- ✓ Conduct property inspection for sub-sale properties
- ✓ Set up auto-debit for loan repayment to never miss payments
Conclusion
2025 is one of the best years to buy your first home in Malaysia, thanks to generous government schemes and stamp duty exemptions. However, homeownership is a long-term commitment. Take time to calculate your budget, understand all costs involved, and ensure you can comfortably afford the monthly repayments. With proper planning and the government support available, owning your first home is within reach.
📚 Complete Your Home Buying Journey
🏛️ 2025 Gov Schemes
You're reading this! RM12.8B guarantee, stamp duty exemption, tax relief up to RM7,000.
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