With this issue in mind, the former Minister of Finance, Lim Guan Eng has initiated a national campaign called Home Ownership Campaign (HOC) in 2019 to help clear the backlog in the housing market, as well as to encourage property ownership.
Last year (2020), the government introduced the Short-Term Economic Recovery Plan (PENJANA) as the Malaysian economy has been severely affected by the COVID-19 pandemic. One of the initiatives shared is the re-introduction of HOC in 2020, which was extended until May 2021.
However, because of the continued lockdown restrictions in Malaysia, the Ministry of Finance (MoF) has announced that the residential home stamp duty exemption scheme under the Home Ownership Campaign (HOC) will be extended for yet another six months until 31 December 2021.
Here are some things you should know about this HOC.
What are the new HOC's requirements?
- MUST be a Malaysian citizen
- No limit to the number of purchases
- Property price (before discount) is within the range of RM300,001 to RM2.5 million (for residing purpose only)
- Sales and Purchase Agreement (SPA) must be stamped between 1 June 2020 and 31 December 2021
- A minimum of 10% discount (from property price) applicable to all units that are not subjected to government price control
- The stamp duty exemption is applicable to the following:
Instrument of Transfer
| House Price | Stamp Duty | Stamp Duty Under HOC 2020-2021 |
|---|---|---|
| First RM100,000 | 1% | Exempted |
| RM100,001 to RM500,000 | 2% | Exempted |
| RM500,001 to RM1,000,000 | 3% | Exempted |
| RM1,000,001 to RM2,500,000 | 4% |
3%
|
Instruments on Securing Loans
| Loan Amount | Stamp Duty | Stamp Duty Under HOC 2020-2021 |
|---|---|---|
| Up to RM2,250,000 | 0.5% | Exempted |
Here’s how HOC works. If you buy a house worth RM550,000…
Without HOC, you’ll have to pay (based on Loanstreet’s Home Loan & Stamp Duty Calculator):
| Down Payment | RM55,000.00 |
|---|---|
| Stamp Duty Loan | RM2,475.00 |
| Stamp Duty MOT | RM10,500.00 |
| Monthly Repayment (3.5% @ 35 years loan, 90% of purchase price) |
RM2,045.79 |
| Total Payment | RM70,020.79 |
But with HOC, you’ll pay way lesser:
| *Down Payment (with 10% discount) |
RM49,500.00 |
|---|---|
| Stamp Duty Loan | RM0.00 |
| Stamp Duty MOT | RM0.00 |
| Monthly Repayment (3.5% @ 35 years loan, 90% of purchase price) |
RM1,841.21 |
| Total Payment | RM51,341.21 |
Having said that...
Take note that the exemptions are only applicable for residential properties in the primary market like landed houses, condominiums and serviced apartments that are completed or under construction, and governed by the Housing Development Act with a valid advertising and sales permit (AP) and a developer’s license (DL) and/or a Certificate of Completion and Compliance (CCC). 
If you’re thinking about purchasing a small office/home office (SoHo), small office/versatile office (SoVo), small office/flexible office (SoFo) or a subsale unit - SORRY, they're not qualified.
Besides that, the eligible properties in Peninsular Malaysia MUST be registered with the Real Estate and Housing Developers’ Association (REHDA) Malaysia. For Sabah and Sarawak, on the other hand, the eligible properties must be registered with Sabah Housing and Real Estate Developers Association (SHAREDA) and Sarawak Housing and Real Estate Developers’ Association (SHEDA), respectively.
So, don’t forget to check if the property you wish to buy is eligible for HOC to avoid unnecessary disappointments. You can do this by asking the property agent at the showroom or even better, just call the developer.
I have more questions in mind…
1. Do I need to pay a fee before purchasing a property via HOC?
If anyone ever asks you to pay a fee to be eligible for HOC promotions, you can ask the person to go fly a kite. Do know that only developers are supposed to pay the registration and certification fees.2. I bought a property recently and didn’t get the 10% discount or stamp duty exemption. Why?
If you previously signed a SPA within the said timeline and have paid the stamp duties on the Instrument of Transfer and Instrument on Loan Agreement without discounts and stamp duty exemption, you can ask for a refund. First, check if the developer of the unit has registered with REDHA, SHAREDA or SHEDA for HOC. Then, make sure that the 10% discount is reflected in the SPA.
Anyway, if you have further enquiries, please contact REHDA Malaysia Secretariat:
- E-mail: hoc.admin@rehda.com
- Phone: +603 7803 2978
Oh, ALSO, don't forget to check your eligibility via our Comprehensive Home Loan Eligibility Report to know what kind of house (read: property price range) is suitable for you so that you can make an informed decision.
Happy house hunting, Malaysians!
*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.
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