Planning to buy a new house in Malaysia this year? Here’s good news for all first time home buyers! 2025 is definitely the perfect timing to buy a house in Malaysia. It is now easier to own a house as property prices are more stable, and there are more options in selecting flexible housing loans.
Besides, the Malaysian government also introduced many government initiatives to provide support such as BRIM 2025 (Bantuan Rumah Impian Malaysia) and stamp duty exemptions. These government initiatives are being offered to eligible first time buyers. Listen up fellow Malaysians, for those who want to own a house, you’ll not need to worry as these initiatives are introduced to reduce your financial burdens!
Buying a house is no longer a dream and easier than before, regardless of whether you are buying a house for your own stay or for long term investment. This complete guide will walk you through everything you need to know as a first time home buyer in Malaysia, from understanding house loan and government aid, to the legal processes and smart tips to selecting and successfully owning your perfect first home!
Are You a First-Time Home Buyer?
Have you ever thought about what to consider when buying a house? Before owning a house, it is very important to know whether you are qualified as a first time home buyer in Malaysia. A first time home buyer is someone who has never owned a residential property in Malaysia or abroad. This means that you do not have your not name in any property title as owner or co-owner. If you’ve inherited a property or previously held ownership, you may not fit into the criteria of being a first time owner.
To be eligible to be a first time home buyer in Malaysia, you must:
- Age: You must be a Malaysian citizen aged 21 or above
- Ownership: Had never previously owned a residential property and never purchased a property before in Malaysia
- Income: Meet income thresholds & property price criteria set by government backed initiatives
If you meet the above criteria, you will be eligible to access benefits provided by the government. The criteria above determines whether you are eligible for stamp duty exemptions as first time buyers can get full or partial exemptions for properties up to a certain value, reducing the upfront cost of owning a house in Malaysia.
This sounds like a great deal right! But there’s even more benefits other than stamp duty such as BRIM. BRIM 2025 (Bantuan Rumah Impian Malaysia) support is provided by the Malaysian government that offers financial support and easier loan terms for first time home buyers, making it easier to afford your first home.
With all these benefits provided, it is crucial to determine whether you are a qualified first time home buyer so that you can take full advantage of these existing benefits and make wiser financial decisions.
Hence, to those who plan to own a house, it is advisable that you should understand your status as early as possible to help you plan better and make a smart move before landing for your dream house.
Costs to Expect When Buying Your First Home
Owning a house in Malaysia comes with lots and lots of hidden and upfront costs, which is way more than just the property’s price. First time buyers Will need to be aware of all the additional costs required to budget effectively and ensure a smoother home buyer experience, as all we want is to look for ways to reduce cost instead of increasing cost without limits! Below are the costs listed down before securing a property.
1. Booking Fee & Down payment
- Booking fee is a price that a buyer needs to pay to reserve the property unit, and the cost varies among housing developers.
- Down payment is usually 10% of the property’s purchase price.
2. Legal Fees
- Legal fees cover the preparation of Sales and Purchase Agreement (SPA) and loan agreement. These fees are calculated based on the property’s purchase price.
3. Stamp Duty Malaysia
Stamp duty refers to the fee imposed on your property’s Sale and Purchase Agreement (SPA), Memorandum of Transfer (MOT), and loan agreement documents. It typically falls under two main categories:
- Ad Valorem: Based on the value of the property or loan agreements.
- Nominal duties: Chargeable on a fixed duty depending on the type of legal document.
First time home buyers might be eligible for MOT stamp duty exemptions, especially if the property falls below RM500,000.
4. Memorandum of Transfer (MOT) Fees
MOT is a legal document that transfers ownership of the purchased property (strata or individual title) from the previous owner to the new buyer, or from developer to buyer. It’s important to note that the correct term is Memorandum of Transfer, not Memorandum of Charge, even though financial charges may be involved in the process.
When a property purchase is financed through a bank loan, the MOT is usually signed alongside the Sale and Purchase Agreement (SPA) and the loan agreement. This streamlined process helps buyers avoid making multiple trips to the lawyer’s office. However, in cases where the property is still under development, the MOT will only be signed after the issuance of the individual or strata title.
In summary, MOT fee = Stamp Duty on property transfer. Understanding how MOT fee for home purchases works can help you more effectively in budgeting better when purchasing a home in Malaysia.
House Loan Guide for First-Time Buyers
Feeling excited but overwhelmed to own a house? Don’t worry! For all first time home buyers, this article will guide you through understanding house loan processes, financial options and how to utilize KWSP savings to make your journey as smooth as possible.
📊Step 1: Assess Your Financial Health
Applying for a house loan in Malaysia is not as complicated as you think it is! When applying for a house loan in Malaysia, firstly you will need to get your financial health assessed. Being said that, you’ll need to ensure that you have a stable source of income, manageable debt levels and a good credit score.
📄Step 2: Prepare the Required Documents
You will also need to prepare necessary documents such as identification, income statements, EPF Statements and property details for assessment and verifications.
🏦Step 3: Compare Bank Loan Packages
Next, approach multiple banks to compare loan packages so that you will have few loan options to select from and shortlist the best loan available. The bank will then evaluate your application based on different criteria. A bank will evaluate areas such as credit score, income stability and debt service ratio (DSR) before approving a house loan.
💰Step 4: Using KWSP or Joint Loans for Your First Home
Under Malaysia’s first home buyer loan schemes 2025, first time home buyers can now opt to utilize their KWSP (EPF) Account 2 savings to fund down payment, legal fees and other related costs. Sounds great isn’t it? You can withdraw the difference between the property’s purchase price and the loan amount, plus an additional 10% of the property’s price or available balance in Account 2, whichever is lower.
Alternatively, if you need a larger loan amount, you can also opt for a joint loan, which involves two or more individuals applying for a house loan together. Of course joint loan might be a good option however it comes with pros and cons. You are able to qualify for a larger house loan as both sources of income are combined and repayment responsibilities are divided among both parties.
However, it comes with potential risk as if one party fails to fulfil the house loan, it will affect credit scores for both parties and can also affect your eligibility for other loans. You should take into consideration all of the factors above and think twice before making a decision about what type of house loan you are comfortable to go with.
How to Calculate MOT Fees (with Calculator)
Moving on to MOT (Memorandum of Transfer) fee for home purchase. This is a key cost to prepare when buying a property in Malaysia. MOT is a legal document that officially transfers the ownership of the property from the seller to the buyer. MOT Fee for home purchase is the stamp duty charged on the ownership transfer and is payable upon completion of sales, usually after the Sales and Purchase Agreement (SPA) is signed and the property title is fully transferred. MOT can be calculated online here.
Stamp duty is paid at the time of execution of MOT, calculated in tiers:
Example of Property Priced at RM 750,000
For a property priced at RM 750,000, the MOT fee would be:
- 1% of RM 100,000 = RM 1,000
- 2% of RM 400,000 = RM 8,000
- 3% of RM 250,000 = RM 7,500
- Total MOT fee = RM16,500
The buyer will need to pay a total of RM 16,500 for MOT. This amount is paid to the government via your lawyer when processing the MOT.
Stamp Duty Exemptions Cases
- First time Homebuyers
If you are a first time home buyer, you may qualify for stamp duty exemptions under government initiatives. If the purchased property is priced below RM500,000, full exemptions might be applied, which reduces the MOT cost to RM0! RM0! You are right, RM0 as no cost is required! This exemption is valid until the end of 2025.
For homes that are priced above RM500,001, you will not benefit from any stamp duty exemption starting from 2024.
- Transfers between Loved Ones
Starting from 1 April 2023, Malaysia Government has announced stamp duty exemption for all property transfers that fall under the first 1 million based between loved ones. Under this exemption, if you are transferring a property (<RM1 million) between spouse, parents & children, grandparents & grandchildren, there is no need to pay stamp duty.
Any sum in excess of RM1,000,000 is still subjected to stamp duty but a 50% waiver will be applicable on such stamp duty.
- Foreigners
As announced in Malaysian Budget 2024, a flat stamp duty rate of 4% is imposed on the property transfer in favour of foreigners, individually or between companies.
Before this adjustment, foreigners would be subject to the same stamp duty rate as the normal Malaysian Citizens.
Incentives You Shouldn’t Miss in 2025
Being a first time home buyer is beneficial as owning a house is no longer a dream! The Malaysian government offers many incentives such as BRIM 2025, up to state level housing initiatives, which could help a lot in reducing financial burden for fellow Malaysians.
BRIM 2025
BRIM 2025 is introduced to boost affordability among Malaysian buyers. The Malaysian government has allocated RM900 million under BRIM to support affordable housing initiatives. This initiative makes house ownership more accessible, offering financial assistance, reduced interest rates, tax relief and subsidies for Malaysians that are eligible for first home purchase. These comprehensive measures reflect the government’s commitment to making homeownership more accessible and affordable for us. All thanks to the Malaysian government!
Affordable Housing Schemes: Selangorku, Smart Sewa, etc
First home buyers can look into state level incentives offering affordable housing from Selangor & Penang. The Rumah Selangorku program provides housing options ranging from RM42,000 to RM250,000, targeting the B40 & M40 income groups.
The Selangor state government has also introduced the Smart Sewa (Smart Rental) scheme, where tenants can receive a portion of their rent back to use as a down payment for purchasing a home. This is definitely something attractive to all home buyers!
Whereby in Penang, the state plans to construct 35,000 new houses under the Rumah Bakat Baru Madani project, to address the increasing demands for affordable houses. By leveraging these incentives and proper planning, you can now make the right decision to achieve your goal of owning a house in 2025!
Step-by-Step Process: From Searching to Owning House
You are one step closer to owning a house now! Here is a step-by-step guide to help you understand the process and preparing to own a house.
1. Property Search
Start by identifying your needs such as: location, property type, size, and budget. Use trusted property portals, visit show units, or consult real estate agents. Ensure the property is within your affordability range and qualifies for first-time buyer incentives if applicable. Do as much research as you can as the first step to own a house
2. Get Financing
Once you’ve shortlisted a property, you can then apply for a house loan from a bank and provide documents required for loan approval. Banks will assess your eligibility based on income, credit score, debt service ratio (DSR), and employment stability. You may also consider using KWSP Account 2 Savings to fund down payment or opt for Joint loan option.
3. Sign the Sale and Purchase Agreement (SPA)
Once a loan is approved, you are halfway done! The SPA is signed between the buyer and seller, which legally binds both parties to the transaction terms. Signing SPA happens after you pay the balance of 10% downpayment.
4. Pay MOT & Stamp Duty
After the SPA is signed, settle the MOT fees and stamp duty, which legally transfer ownership. A first time home buyer might be eligible for full stamp duty exemption or a 75% waiver.
5. Move In
Once all legal and financial steps are completed, the keys of the purchased property will be handed over and you are now ready to move into your home! Ensure the purchased property is in good condition and all agreed-upon fixtures are in place.
The entire process can take up to 3 to 6 months, depending on various factors like loan approval and property negotiations.
Common FAQs
- Can I use KWSP to pay stamp duty?
No, KWSP (EPF) Account 2 funds can only be used for the downpayment and some related property expenses, but not for stamp duty or legal fees. - What’s the difference between MOT and SPA?
SPA (Sales & Purchase agreement) is the legal agreement signed between the buyer and seller outlining the sale terms including price, payment schedule & handover timeline, while MOT (Memorandum of Transfer) is the document that transfers property ownership from the seller to the buyer once all conditions in the SPA are fulfilled and when stamp duty is paid. - Is BRIM 2025 applicable to house purchases?
Yes, BRIM 2025 benefits are available for first-time home buyers, particularly targeting B40 & M40 lower income group individuals under Budget 2025. BRIM 2025 includes affordable housing initiatives, loan guarantees under SJKP(Housing Credit Guarantee Scheme) and stamp duty exemptions. These measures aim to ease financial burden for first time home buyers. - Can I apply for a house loan with variable income?
Yes, you can apply for a house loan with variable income, but subject to approval by the bank, depending on a consistent history of income. They will assess the average income over the past 6–12 months and your ability to repay the loan. You will need to provide proof of incomes such as bank statements, tax fillings or contracts to support your application.
Final Thoughts
In conclusion, buying a house in Malaysia is not as difficult as it seems to be. Being a first time home buyer in Malaysia is achieving a huge milestone in your life! With proper guidance, you’ll be on a smooth journey to own a house successfully.
This complete guide for first time home buyers 2025 has covered everything you need to know—from understanding BRIM 2025, MOT and stamp duty exemptions to the detailed steps of purchasing your first home.
After reading this comprehensive article, we believe that you are sufficiently equipped with most knowledge on owning a house, and you can make your dream of owning a house a reality. Getting to know your financial position, understanding government incentives available and checking your eligibility to enjoy the benefits provided to ease your burden in owning a house.
Get started now to take advantage of all the benefits available to you in 2025 to make your dream come true! Do not wait longer and take your first step now to buy your first home before 2025 ends!
