With an allocation of RM421 billion, what do home buyers and the property market look forward to from Budget 2025?
Budget 2025 was tabled last Friday, and with an allocation amounting to RM421 billion, it is the country’s biggest-ever federal spending plan. The third MADANI Budget emphasizes implementing reforms decisively, eliminating bureaucratic red tape, increasing wages and incomes, and addressing the cost of living.
Housing, of course, is an issue close to the Malaysian people’s hearts. Here, we look at what’s in store for home buyers and the property market from Budget 2025.
Support For First-Time Home Buyers
RM10 billion has been allocated under the Housing Credit Guarantee Scheme (HCGS). Under the scheme, eligible first-time home buyers can get government-guaranteed loans of up to RM500,000 to purchase homes. It is expected to benefit over 20,000 Malaysians.
HCGS was established as a company wholly owned by the Minister of Finance in 2007. The scheme involves the purchase of low- and medium-cost houses, whether under construction or completed, as well as existing houses from sellers or auction houses.
Over 57,000 home buyers have already benefited from government guarantees under the HCGS, as RM12.8 billion has already been disbursed. Previously, the maximum financing was set at RM300,000.
Tax Relief for Home Buyers
Tax reliefs have been introduced for the purchase of residential properties that can be claimed for three consecutive assessment years for sale and purchase agreements completed between January 1, 2025, and December 31, 2027.
The tax relief will be based on the price of the property:
- For properties priced up to RM500,000, a tax relief of up to RM7,000 is offered.
- For properties priced between RM500,000 and RM750,000, a tax relief of up to RM5,000 is offered.
As this relief will only be available for home purchases after January 1, 2025, it is expected to help first-time home buyers to enter the market and stimulate demand.
Affordable Housing Initiatives To Bolster Homeownership
To address the issue of affordable housing, the budget allocates funds for the development of more affordable housing projects across the country. This initiative is aimed at providing suitable housing options for low to middle-income earners.
RM900 million has been allocated to implement 48 People’s Residency Programs (PRR) and 14 Rumah Mesra Rakyat (RMR) projects. This includes new PRR developments in Port Dickson and Seberang Perai Tengah. 30 PRRs are expected to be completed by the end of 2025, benefiting almost 17,500 new residents.
RM300 million has been allocated to KWAP and RM200 million to UDA Holdings Bhd (UDA) to develop affordable housing on wakaf land. Additionally, the Public Sector Home Financing Board (LPPSA) will support civil servants purchasing homes on such land. Home financing will be available for a period of up to 40 years.
The government has agreed to streamline and increase the assistance to build new public houses, such as those for PPRT residents, fishermen, Kampung Baru Cina, to a maximum of RM90,000. The ceiling rate for public housing repairs has also been raised to a maximum of RM20,000.
The ceiling rate of assistance for the construction of new fishermen houses or resettlement has also been increased. For those in Peninsular Malaysia, the new ceiling rate is RM84,000 from the previous RM56,000 while for those in Sabah and Sarawak, it has been increased to RM90,000 from RM68,000.
RM10 million is provided for NGOs and Jakoa to collaborate in building houses under the EPIC Homes programme. It will help provide electricity and clean water to the Orang Asli more economically and quickly.
Assistance For Maintenance and Upgrades
RM200 million has been allocated for the maintenance of low and medium-cost public strata homes, including the replacement of outdated elevators in People’s Housing Projects (PPRs).
RM84 million has been allocated to upgrade basic and social facilities in Chinese New Villages.
Almost RM100 million have been allocated to upgrade 48 Madani Public Parks to include recreational areas with serene and comfortable landscapes for the use of urban and small-town communities.