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HOC 2020: Get 10% Discounts & Free Stamp Duty When You Buy a House

Updated 06 Jul 2020 – By Team Loanstreet


Homeownership in Malaysia is a tricky situation - there’s a demand and then there’s also a supply, but financial capability seems to be an issue here. Based on Bank Negara Malaysia (BNM) insights, these supply-demand imbalances in the property market have increased since 2015. And the reason for this is not because of the strict lending rules on housing loans, but it’s because (drum roll, please)... houses aren’t affordable anymore.

This phenomenon has created another quite scary problem - the UNSOLD UNITS. Yes, according to the Valuation and Property Services Department’s (JPPH) latest figures, the number of unsold completed residential units rose from 20,304 units to 30,115 units year-on-year (as of 30 September 2018).

 


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. 

This 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 2020!


Yup, this campaign was created to help you own your own home. People who want to buy a home are always alert during this campaign because they are not always there. Okay, before we talk more about buying all these homes, here are some things you should know about this HOC.


 

So, who’s eligible for HOC and what are the promotions?

From 1 June 2020 to 31 May 2021,  all Malaysian citizen who’s looking to buy a house (that’s priced above RM100,000 and not more than RM2.5 million) will enjoy a minimum of 10% discount (there’s a possibility for it to be more) from the property developer. 


On top of that, you’ll also get a 100% stamp duty exemption on the Instrument of Transfer and Instrument of Loan Agreement - well, it depends on the house price range. 


Instrument of Transfer 

House Price Stamp Duty
First RM100,000 Exempted
RM100,001 to RM500,000 Exempted
RM500,001 to RM1,000,000 Exempted
RM1,000,001 to RM2,500,000 3% (instead of 4% which will take effect on July 2019)


Instrument of Loan Agreement

House Price Stamp Duty
Up to RM2,500,000 Exempted
*The amount of exemption on Instrument of Loan Agreement is 0.5% of the loan amount.

And of course, to meet the eligibility criteria, the purchaser must have their SPA signed and stamped on during the mentioned timeline.
 

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):




But with HOC, you’ll pay way lesser:



 

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 an 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.
 

3. If I buy more than one house, can I get stamp duty exemptions for all of them?

The answer is NO. Unfortunately, the stamp duty exemption is limited to 1 unit for one 1 purchaser only. 


Oh, ASLO, 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!




 
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