Malaysia’s Budget 2026, tabled on 10 October 2025, takes a measured but strategic approach to real estate. Instead of driving a property boom, it focuses on home affordability, responsible ownership, and urban revitalisation.
The key takeaway? The government wants more Malaysians — especially young and first-time buyers — to own homes, while cooling speculative and foreign-driven demand. Developers, too, are encouraged to repurpose unused commercial buildings into livable residential spaces, keeping city centres vibrant and efficient.
Malaysia Budget 2026: Key Housing and Property Reforms at a Glance
Extension of Stamp Duty Exemption for First-Time Home Buyers
First-time Malaysian buyers will continue to enjoy full stamp duty exemptions on both the Sales & Purchase Agreement (SPA) and loan agreement for properties priced up to RM500,000.
- Extended until 31 December 2027.
- Applies only to Malaysian citizens.
Higher Stamp Duty for Foreign Buyers
To balance local affordability, the government has doubled the stamp duty rate for non-citizens and foreign companies purchasing residential property:
- From 4% → 8%, effective 1 January 2026.
- Permanent residents are exempt from this increase.
Tax Deduction for Converting Commercial to Residential Properties
To address Malaysia’s surplus of empty office and retail units, developers can now claim a 10% tax deduction (capped at RM10 million) on qualifying expenses when turning commercial buildings into residential homes.
- Applies starting Year of Assessment 2026 (YA 2026).
Expanded Housing Credit Guarantee Scheme (SJKP)
The government has boosted the SJKP guarantee limit to RM 20 billion, potentially enabling 80,000 more Malaysians — especially gig workers and self-employed buyers — to qualify for housing loans.
Youth Housing Financing Support
Young Malaysians working in the public sector can now access LPPSA loans of up to RM1 million, improving access to larger or better-located homes.
Urban Regeneration and Public Housing Maintenance
RM500 million has been allocated for PPR (public housing) maintenance and urban regeneration projects, especially in older city districts. This improves liveability while preserving the country’s heritage architecture.
Malaysia Budget 2026: What Home Buyers Stand to Gain (and Lose)
For first-time home buyers, the Budget 2026 measures are a welcome relief. The extended stamp-duty exemption and expanded loan guarantees reduce upfront costs and make financing far easier — especially for those earning variable or freelance incomes.
If you’re planning to buy a property below RM500,000, this extension effectively lowers your entry cost by several thousand ringgit, depending on loan size. Meanwhile, for foreign buyers, the higher 8% stamp duty translates to significantly higher purchase costs — a clear sign the government is prioritising locals. Expect fewer foreign bidders in the mid- to high-end market, which could stabilise or slightly ease prices in certain segments.
Young professionals and gig-economy workers will benefit most from SJKP and LPPSA enhancements, as these make banks more willing to approve their housing loans.
What Does Malaysia Budget 2026 Mean for Malaysia’s Property Market
The ripple effects of Budget 2026 will be felt across multiple market layers:
Increased demand in affordable-home segments
With incentives up to RM500,000 extended till 2027, developers are likely to build more projects within this range — especially in urban outskirts like Rawang, Semenyih, and Johor Bahru.
Moderation of foreign demand
The 8% stamp duty is expected to cool luxury and high-end condominium sales to non-citizens. Local buyers may find less competition for city-centre units, stabilising prices.
Rise in adaptive reuse and redevelopment projects
The new 10% tax deduction makes it financially viable for developers to repurpose old malls or office towers into residential units. Expect more “loft-style” or compact apartments in urban cores.
Better housing quality and urban renewal
With RM500 million channelled toward PPR maintenance and urban regeneration, residents in older areas can expect upgraded facilities, safer environments, and rising neighbourhood values.
Healthier long-term market balance
By supporting local ownership while moderating speculative activity, Budget 2026 positions Malaysia’s real-estate market for more sustainable, demand-driven growth rather than cyclical booms.
Budget 2026 isn’t a “fireworks” budget — but it’s a strategic, stability-focused plan that favours Malaysian citizens, first-time buyers, and practical housing solutions. It’s a budget built on balance:
- Support for affordability.
- Encouragement of adaptive reuse.
- Moderation of speculation.
- Investment in urban quality.
If you’re eyeing your first home or planning to upgrade, 2026–2027 could be the most favourable window to make your move — before property prices adjust to the renewed demand.