MALAYSIAN GOVERNMENT INCENTIVES FOR FIRST TIME HOME BUYERS IN 2025!

Are You Planning to Buy Your First House in 2025? Here's How You Can Save Big!

Here’s a YouTube video created based on this blog. Watch it for a simpler and clearer understanding!

Summary:

This blog post details Malaysian government incentives for first-time homebuyers in 2025. Two key programs are highlighted: the Skim Jaminan Kredit Perumahan (SJKP), a loan guarantee scheme for those with irregular incomes, and tax relief for the interest portion of home loans, up to RM7,000 annually depending on the property price. The post explains the eligibility criteria and application processes for each incentive, emphasizing the government's commitment to affordable and accessible housing. Finally, the post provides practical next steps for readers interested in utilizing these programs.

Applying loan for first home

Are you planning to buy your first house in 2025? Congratulations! Owning your first home is a major milestone. While it might feel overwhelming at times, Malaysia’s 2025 housing incentives are here to help you save money and make the process smoother.  

In year 2025, the government is focusing on two main incentives:  

1. Skim Jaminan Kredit Perumahan (SJKP) – a home loan guarantee scheme.  

2. Tax Relief for first-time homebuyers, announced in Budget 2025.

Before we explore the details of the incentives, let's first take a look at the reasoning behind the framework for first-time homebuyer assistance.

Introduction: The Purpose of Promoting Homeownership Through Government Incentives

In 2025, government incentives aimed at first-time homebuyers represent more than just financial assistance—they symbolize a commitment to addressing one of society's most fundamental needs: stable and affordable housing. Housing is not just a place to live; it's a critical foundation for individual well-being, family stability, and community growth. For many, owning a home is the ultimate goal, providing security, personal wealth, and a sense of belonging.

The purpose of these incentives is to encourage homeownership, particularly for those who have never had the opportunity to buy a property. These incentives are designed to make owning a home more accessible, especially for individuals and families who may face financial challenges or have been excluded from the property market. By promoting homeownership over renting, the government is fostering a more financially independent population, where people are not subject to the uncertainties and escalating costs of the rental market. 

Importantly, these incentives are not intended for real estate investors looking to profit from rental properties. While there’s nothing wrong with investing in rental properties, the primary objective of these programs is to support those who will occupy the home themselves. This ensures that the benefits of homeownership reach those who need it most—first-time buyers who are establishing roots and creating a sense of permanence for themselves and their families. 

The need for accessible housing is especially pressing among lower- and variable-income groups, who often face significant barriers to entering the housing market. For them, a home is not just a luxury; it's a necessity. Without it, these individuals and families can be left vulnerable to the volatility of the rental market or the instability of living in substandard conditions. Recognizing this, the government has introduced a range of initiatives, including affordable housing schemes like PR1MA homes, to help meet this growing demand.

However, these first-time homebuyer incentives are not limited to just PR1MA properties. Eligible buyers can take advantage of these benefits to purchase a variety of homes—whether a newly-built property, a completed unit, or even a house available through auction. This broad scope ensures that those who are ready to own a home, but may not be interested in government-specific projects, still have the opportunity to benefit from these financial incentives.

By focusing on owner-occupancy, the government is ensuring that these initiatives support sustainable homeownership, helping individuals and families to establish long-term financial security and create thriving communities. In this blog, we will explore the specific incentives available for first-time homebuyers in 2025, and how they can help turn the dream of homeownership into a reality for many.

What Is SJKP and How Does It Help First-Time Buyers?

Have you heard of the Skim Jaminan Kredit Perumahan (SJKP)? If not, don’t worry. It’s a government-backed scheme designed to help Malaysians who might struggle to get a home loan.  

Here’s how it works:  

The Skim Jaminan Kredit Perumahan (SJKP) is a Malaysian government initiative aimed at assisting individuals without a fixed income or formal payslips in securing housing loans from financial institutions. This scheme provides a government guarantee, making it easier for such individuals to obtain financing for their first home.

Key Features of SJKP:

- Financing Limit: Up to RM500,000, which includes the principal loan amount, Mortgage Reducing Term Assurance (MRTA) or Mortgage Reducing Term Takaful (MRTT), Long Term House Owner’s Takaful (LTHO), legal fees, and valuation fees. 

- Financing Tenure: Up to 35 years or until the borrower reaches the age limit set by the financial institution, whichever comes first. The scheme also allows for multi-generational loans. 

- Guarantee Coverage: The government provides a guarantee exceeding 100% of the financing amount, covering the principal loan, MRTA/MRTT, LTHO, legal fees, and valuation fees. 

Eligibility Criteria:

- Citizenship: Open to Malaysian citizens.

- Income: Designed for individuals without a fixed income or formal payslips, such as self-employed persons, gig economy workers, or those in informal employment sectors.

- Property Type: Applicable for the purchase of new or existing residential properties, including auctioned homes, intended for owner-occupation.

- Credit History: Applicants should not have any adverse credit records. Specifically, there should be no overdue payments exceeding two months within the past 12 months in the Central Credit Reference Information System (CCRIS), and no other negative credit records in the past 24 months. 

- Debt Service Ratio (DSR): The total repayment amount for all loans should not exceed 65% of the applicant's gross monthly income. 

Application Process:

1. Eligibility Check: Prospective applicants can use the eligibility calculator available on the (https://www.sjkp.com.my/semak-kelayakan) to assess their qualification.

2. Documentation: Prepare necessary documents, including proof of income (e.g., bank statements), identification, and property details.

3. Financial Institution Application: Submit a housing loan application through participating financial institutions that collaborate with SJKP.

4. Approval Process: The financial institution will assess the application and, upon approval, SJKP will provide the guarantee for the loan.

By offering a government-backed guarantee, SJKP facilitates homeownership for Malaysians who may face challenges in securing traditional housing loans due to irregular income streams or lack of formal documentation. This initiative plays a crucial role in promoting inclusive access to home financing, thereby supporting the broader goal of increasing homeownership among Malaysians.

For more detailed information, please visit the SJKP Official Website at https://www.sjkp.com.my/. Or please watch the YouTube video below to understand the incentives better:

Tax Relief for First-Time Homebuyers

In the 2025 Budget, the government announced tax relief for first-time homebuyers, giving you another way to save money on the interest portion of housing loan repayments.

In Malaysia's Budget 2025, the government introduced specific tax relief measures to support first-time homebuyers, aiming to make homeownership more accessible and affordable.

Key Details of the Tax Relief:

• Eligibility: First-time homebuyers purchasing residential properties.

  
  

• Property Price Thresholds and Corresponding Tax Relief:

• For homes priced up to RM500,000: Eligible for a tax relief of up to RM7,000 per year.

• For homes priced between RM500,001 and RM750,000: Eligible for a tax relief of up to RM5,000 per year.

• Duration: This tax relief can be claimed for three consecutive assessment years.

  
  

• Validity Period: Applicable to sale and purchase agreements (SPAs) executed between January 1, 2025, and December 31, 2027.

Additional Considerations:

• The tax relief is specifically for the interest portion of housing loan repayments.

• The residential property must be owner-occupied and not used to generate rental income during the relief period.

These tax relief measures are part of the government's broader strategy to encourage homeownership among Malaysians, particularly first-time buyers, by alleviating some of the financial burdens associated with purchasing a home.

Sources:

• Budget 2025: Boost for first-time home ownership

• First-time house buyers eligible for tax relief of up to RM7,000

• Income tax relief of up to RM7,000 for three years on interest payments

Why These Incentives Matter

Buying a home can be expensive, but these incentives help make it affordable. Imagine saving thousands of ringgit on taxes and avoiding a big down payment. That’s extra money for your family, renovations, or even just a safety net for emergencies.  

And here’s the best part: These programs aren’t just for high-income earners. They’re designed for everyday Malaysians who want a place to call their own.  

Key Takeaways

- SJKP helps you get a home loan even if you don’t have a strong credit history or regular income.  

- Tax relief can save you up to RM7,000 per year on your taxes when you buy a home.  

- Both incentives are focused on helping first-time homebuyers like you in 2025.  

Your Next Steps:

1. Visit the SJKP website at https://www.sjkp.com.my/ to check your eligibility and learn about the application process.  

2. Start saving and researching properties priced under RM500,000.  

3. When tax season comes, gather your home purchase documents and submit them to LHDN to claim your tax relief.  

 

Got question?

Are you ready to take the first step toward owning your dream home? If you have questions or need guidance, let us know in the comments below. Your feedback helps us provide more valuable content for readers like you.  

Happy house hunting!

Disclaimer:

The content provided in this blog is for informational, educational, and learning purposes only. While we strive to present accurate and up-to-date information, readers are advised to exercise their own discretion and verify details with the relevant authorities or entities involved, such as SJKP or the Inland Revenue Board of Malaysia (LHDN).

This blog does not constitute financial advice, legal counsel, or any official documentation. The incentives, eligibility criteria, and processes described may vary or change over time. Readers are encouraged to consult with the respective organizations or financial professionals for specific guidance tailored to their individual circumstances.  

The authors and publishers of this blog shall not be held liable for any errors, omissions, or outcomes arising from the use of the content herein. By reading this blog, you acknowledge and accept this disclaimer.