How Much Do You Know About The Home Ownership Program (HOC)?

May 22, 2023

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How Much Do You Know About The Home Ownership Program (HOC)?

Can the average income of Malaysians afford the housing prices in Kuala Lumpur? For Malaysians in the middle and low income class, the answer is clear: most people’s salaries cannot afford the burden of buying a house.

After the outbreak of the pandemic in 2020, more Malaysians have lost their jobs or their business has decreased due to the economic downturn. Everyone feels that buying a house is a distant dream.

However, you don’t need to worry, because the government has launched a few schemes to help you. In addition to launching affordable housing to benefit the people, especially young people who have just graduated from social work, the government also announced the renewal of the national economy in June 2020. The restoration (PENJANA) policy has implemented the “Home Owning Program” (HOC) to help people continue to implement their life-buying housing plans during the current economic difficulties of the epidemic. So, how much do you know about this program?

a. Regulations of the Home Ownership Scheme (HOC)

Applicable to sales and purchase agreements (Sales and purchase Agreements – S&P) signed between June 1, 2020 and May 31, 2020.
Only applicable to new residential properties from developers.
Only benefit from new developments registered with the Real Estate Developers Association (REHDA) to participate in this scheme.
Buyer must be a Malaysian citizen.
Allows unlimited purchase of units participating in Home Ownership Scheme (HOC) developments.
Buyers of second-hand homes are not entitled to the benefits of the Home Ownership Scheme.

b. 10% Discount on Home Ownership Scheme (HOC)

As long as you purchase a project approved by the developer as an HOC and the house price is between RM300,000 and RM2.5 million, you can enjoy a 10% discount.

c. People Can Borrow Higher Loan Amount

In the short-term economic recovery plan announced by the government on June 5, 2020, it was announced that the 70% loan policy for the purchase of a third home would be abolished.
This policy is limited to houses priced at RM600,000 and above, usually with a maximum loan of 90%.
For example, if you intend to buy a third house, and the house price is RM1 million, under the new government policy, you can borrow up to 90% of the loan, which is RM900,000.
Buyers of houses do not need to prepare a large down payment, and can invest the money in other real estate.

d. People Can Enjoy Lower Mortgage Interest

OPR (Overnight Policy Rate) is called the overnight policy rate, which is an interest rate for interbank lending.
The main purpose of the overnight policy rate is to encourage people to withdraw their bank deposits for consumption. The purpose is to promote domestic consumption and increase capital liquidity, thereby promoting overall economic development.
Bank Negara Malaysia has cut the overnight policy rate (OPR) 4 times in 2020, and housing loan interest will also be cut along with the OPR (OPR was adjusted to 1.75% on July 7).

e. People Can Enjoy Full Or Lower Stamp Duty Fees

As long as the developer is approved as a HOC project between RM300,000 and RM2.5 million, you can enjoy full stamp duty exemption.
The stamp duty for buying a house whose developers are approved as HOC between RM1 million and RM2.5 million will be reduced from the original 4% to 3%. This 3% stamp duty will only be collected on the balance after RM1 million.
For example, for a house priced at RM2 million, the first RM1 million is exempt from stamp duty, while the remaining RM1 million needs to pay 3% stamp duty.

If you already have a plan to buy a house, instead of slowly saving money every year to pay the down payment of the house, it is better to act now while the iron is hot to enjoy the above-mentioned discounts in the plan. Although you need to pay the mortgage every month, is it all worth it when you think of owning your own home and the appreciation rate of real estate in the future?

If you don’t want to miss this good news, and want to know more about government plans and real estate information, please click the following WhatsApp Chat Now link to contact us, and please stay tuned to Aunty Caroll Property’s social media.

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