Budget 2025, tabled recently, stands as Malaysia’s largest-ever federal spending plan, totaling RM421 billion. This third iteration of the MADANI Budget centers on crucial reforms aimed at improving efficiency, cutting bureaucratic red tape, increasing wages, and tackling the rising cost of living.
One of the most closely watched areas in the budget is housing, which remains a priority for many Malaysians. Here’s a breakdown of the key housing-related initiatives outlined in Budget 2025.
Support for First-Time Homebuyers
The Housing Credit Guarantee Scheme (HCGS) will receive RM10 billion to aid first-time homebuyers in obtaining government-backed loans for homes priced up to RM500,000. Over 20,000 Malaysians are expected to benefit from this scheme. The HCGS, established in 2007, enables eligible buyers to purchase low- and medium-cost houses, whether new or existing, with previous allocations already benefitting 57,000 homebuyers.
Tax Relief for Home Purchases
To further support homeownership, Budget 2025 introduces tax relief for property buyers. Buyers who enter into sale and purchase agreements between January 1, 2025, and December 31, 2027, can claim tax relief for three consecutive assessment years. The relief offered is structured as follows:
- Properties priced up to RM500,000: Up to RM7,000 tax relief
- Properties priced between RM500,000 and RM750,000: Up to RM5,000 tax relief
These measures are expected to spur demand in the real estate market, especially among first-time buyers.
Boosting Affordable Housing
Budget 2025 has set aside funds to expand affordable housing projects to provide viable options for low- to middle-income groups. RM900 million will be used to implement 48 People’s Residency Programs (PRR) and 14 Rumah Mesra Rakyat (RMR) projects, benefiting nearly 17,500 new residents. Additionally, RM300 million is allocated to KWAP and RM200 million to UDA Holdings to develop affordable housing on wakaf land, supporting civil servants with home financing options for up to 40 years.
Further, the government is increasing financial support for building public houses for specific groups, including PPRT residents, fishermen, and Kampung Baru Cina, raising the assistance ceiling for new homes to RM90,000 and repair works to RM20,000.
Support for Fishermen and Indigenous Communities
New housing for fishermen in Peninsular Malaysia will see an increase in ceiling rates from RM56,000 to RM84,000, and from RM68,000 to RM90,000 for Sabah and Sarawak. Additionally, RM10 million is provided under the EPIC Homes program to supply clean water and electricity for the Orang Asli communities.
Property Maintenance and Upgrades
RM200 million has been earmarked for maintaining low- and medium-cost public strata homes, focusing on upgrading facilities like elevators in People’s Housing Projects (PPRs). Meanwhile, RM84 million will go towards improving basic and social amenities in Chinese New Villages, and nearly RM100 million has been allocated to upgrade 48 Madani Public Parks across urban and small-town areas to enhance recreational spaces.
Through these efforts, Budget 2025 takes significant strides in addressing Malaysia’s housing needs, with a particular focus on making homes more affordable and accessible for first-time buyers and lower-income families. The investments in housing development, tax incentives, and maintenance upgrades are expected to boost economic activity while providing a stronger foundation for homeownership across the country.
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