Home Ownership Campaign 2020 – What You Need To Know!
What was the HOC all about?
The HOC was a government initiative designed to support homebuyers looking to purchase property. At the same time, it also encouraged the sales of unsold properties in Malaysia’s housing market.
The campaign was targeted to run from 1 January 2019 through to 30 June 2019, but it was extended till 31 December 2019.
Now , the Home Ownership Campaign (HOC 2020-2021) is back from 1st June 2020 to 31st May 2021.
- HOC 2020-2021 is an initiative by the Government to stimulate the housing sector and help buyers in homeownership. As such, the Government offers stamp duties exemptions on the Instrument of Transfer and Instrument on Loan Agreement.
- The Campaign is open to ALL Malaysian individuals.
What are the benefits of the Home Ownership Campaign (HOC) 2020?
The HOC this time around carries the same set of benefits as previously, notably:
- Stamp duty exemption on the instruments of transfer and loan agreement for the purchase of residential homes priced between RM300,000 to RM2.5 million (subject to at least 10% discount provided by the developer).
- The exemption on the instrument of transfer is limited to the first RM1 million of the property price, while full stamp duty exemption is given on loan agreement effective for Sales and Purchase Agreements (SPA) signed between 1st June 2020 to 31st May 2021.
Let’s say you bought a property at RM400,000…
Without HOC, you’d have paid:
|Down Payment (RM400,000 x 10%)||RM40,000|
|Stamp Duty Loan (RM360,000 x 0.5%)||RM1,800|
|Stamp Duty MOT (100,000 x 1% + 300,000 x 2%)||RM7,000|
|Monthly Repayment (3.5% @ 35 years loan, 90% of purchase price)||RM1,487.85|
With HOC, you only pay
|*Down Payment [(RM400,000 x 90%) x 10%]||RM36,000|
|Stamp Duty Loan||RM0|
|Stamp Duty MOT||RM0|
|Monthly Repayment (3.5% @ 35 years loan, 90% of purchase price)||RM1,339.06|
*As properties under HOC is entitled to a minimum 10% discount, thus the new property price under HOC is RM400,000 x 90% (10% off).
Who was eligible for the Home Ownership Campaign?
Unlike many of Malaysia’s restrictive affordable housing schemes which come with stringent rules in place, the Home Ownership Campaign had relatively relaxed criteria in a bid to encourage growth in property buying.
- Registered properties: Eligibility only applies to those registered properties listed by developers within the scheme.
- Residential purposes: Purchasers must be buying the property for the purpose of residing within it only.
- Malaysian citizens: Purchasers and co-purchasers must be Malaysian citizens.
- 1 June 2020 to 31 May 2021: To be eligible for the exemptions and discount, a Sales and Purchase Agreement (SPA) must be stamped between 1 June 2020 and 31 May 2021.
What are the eligibility criteria for exemption.
- The Sale and Purchase Agreement (SPA) must be signed within the Campaign period.
- Exemptions are applicable only for residential properties (including serviced apartments and SOHO) that are completed or under construction, and governed by the Housing Development Act with valid Developer’s License (DL) and Advertisement and Sales Permit (AP) and/or Certificate of Completion and Compliance (CCC) or verified by KPKT (for developments of 4 units and below).
- Only residential properties in the primary market are eligible for the stamp duties exemptions, thus sale must be from a developer to a purchaser.
- A minimum 10% discount must be given by the developer, provided that the residential units are not subject to Government price control.
- The discount is given based on approved APDL pricing for projects under construction and registered selling price for completed projects. The discounted price must be reflected in the SPA.
- Eligible properties in Peninsular Malaysia must be registered with the Real Estate and Housing Developers’ Association (REHDA) Malaysia, while eligible properties in Sabah and Sarawak must be registered with Sabah Housing and Real Estate Developers Association (SHAREDA) and Sarawak Housing and Real Estate Developers’ Association (SHEDA) respectively.
What properties did the HOC cover?
The Home Ownership Campaign covered registered residential properties with a value between RM300,000 and RM2.5 million. Those properties must be registered with the relevant authority for each region.
- Sabah: Properties registered with Sabah Housing and Real Estate Developers Association (SHAREDA).
- Sarawak: Properties registered with Sarawak Housing and Real Estate Developers’ Association (SHEDA).
- Peninsular Malaysia: Properties registered with Real Estate & Housing Developers’ Association Malaysia (REHDA).
HOC 2019 was designed to ONLY support residential home purchases. That means all qualifying properties must be built and used as a place of dwelling. Properties cannot be for, or converted to, commercial activities.
Some important questions about HOC 2020-2021.
1) Does it apply to secondary markets?
No, the HOC 2020 only applied to new properties registered under the campaign from specific developers.
2) When does the campaign end?
The campaign will end on 31st May 2021. All qualifying SPA agreements must be signed between 1 June 2020 to 31 May 2021.
3) Do I have to pay a fee to participate?
No, the campaign is free. Developers must pay a registration fee but that does not apply to home owners.
Only developers are imposed with the registration and certification fees.
4) Can I buy multiple properties under the campaign?
Yes, you can. There was no limit to the number of properties you can purchase, and get stamp duty exemptions on all of them, under the HOC 2020.
5) Do all properties receive a 10% discount?
A minimum 10% discount applied on all properties within the scheme, with the exception of those subject to government price controls.
6) What was the exemption amount on the Instrument of Loan?
The exemption on an Instrument of Loan amount covers 0.5% of the loan agreement. That amount covers the standard stamping fee for such an instrument.
- Yes, provided that the 10% discount is reflected in the SPA and the developer registers the project/unit with REHDA/SHAREDA/SHEDA for HOC, However, you would have to apply to LHDN for your refund within the period stipulated in the Stamp Act 1949 (Act 378).
- Not all residential projects/units by a developer are required to register under HOC. As such, we advise that purchasers speak to the developers involved for clarification before proceeding with your purchase.
9) Can I purchase under a company name?
- No, purchases are for Malaysian individuals only.
- Yes, there is no limitations on number of units that can be purchased.
- No, the stamp duty waiver is only applicable for residential properties purchased from a developer (primary market) that are registered with REHDA, SHAREDA or SHEDA.
- Bakar will be eligible for the stamp duty exemption on instrument of transfer (MoT).
- With regards to the stamp duty exemption for the instrument on loan agreement, as the eligibility is dependent on the name(s) stated in the SPA, only Bakar will be eligible for the partial exemption but not En Ali.
- For example, En Ali and Bakar has secured a 90% margin of financing (RM450,000). As the loan is under 2 names, the amount of loan is divided equally (En Ali: RM225,000 / Bakar: RM225,000). Bakar will be eligible for stamp duty exemption as his name is on the SPA. On the other hand, En Ali will not be eligible for stamp duty exemption as his name is not on the SPA.
- Memorandum of Transfer (MoT)
- Loan Agreement
Source: propertyguru. com.my and redha. com