Part Of The B40 Group? The Malaysian Government Can Help With Housing!

The Malaysian government has come up with various initiatives to assist the B40 group in securing housing of their own. These consist of the RM1 billion “Fund For Affordable Homes”, RM100 micro-homes, exemption of stamp duty, and 10% discounts!
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Do you know which income group you belong to? T20, M40 or B40?

Basically, T20, M40 and B40 are classifications for Malaysian citizens according to their median household income.

Or in other words...a way to classify who’s rich, who’s okay-okay, and who’s in critical need of assistance.

PropertyGuru Tip
T20 consists of the top 20%, M40 for the middle 40% and B40 for the bottom 40%.

Here’s how to identify which classification you fall under, of which there's a total of 10 categories [according to the Department of Statistic’s (DOSM) Household Income and Basic Amenities Survey Report 2019]:

Median Monthly Income By Household Group

Household Group

Median Income 2020 (RM)

T20

  • T1: RM10,961-RM15,039
  • T2: RM15,040 and above

M40

  • M1: RM4,850-RM5,879
  • M2: RM5,880-RM7,099
  • M3: RM7,110-RM8,699
  • M4: RM8,700-RM10,959

B40

  • B1: Below RM2,500
  • B2: RM2,501-RM3,169
  • B3: RM3,170-RM3,969
  • B4: RM3,970-RM4,849

Essentially, if your monthly household income is below the RM4,850 mark, you and your family are categorized under the bottom 40% of the population. And clearly, the income gap here is pretty sizeable.

Buying a good property when you’re part of the 40% of Malaysians earning less than RM4,850 a month isn’t the easiest thing to do (obviously!).

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Remember, this is the median income for the entire household, not just one single breadmaker! The question is, are there any actions by the government to help the B40 group with housing?

Living on the streets is no laughing matter. So don’t worry, the government definitely isn’t neglecting low income makers! Plenty of measures have been established to help support the B40 group.

Budget 2020, in particular, had heavily emphasised on efforts to help support this segment of the population as well as help elevate the M40 group.

Healthcare-wise, there’s PeKa B40 and mySalam, but how about housing though? Here are 4 initiatives by the government that aim to assist Malaysia’s B40 population with housing!

 

1) Bank Negara’s RM1 Billion “Fund For Affordable Homes”

Heard of this fund before? Earlier this year, Bank Negara Malaysia announced the establishment of Fund for Affordable Homes, a measure which aims to help the B40 group nationwide to afford housing.

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So...what exactly does this magical fund mean for B40 homebuyers looking to receive financial help with buying a property?

  • Extended loan repayment period up to a maximum of 40 years, or until the applicant reaches 70 years of age
  • Financing rate of up to 3.5% per annum (which is incredibly low - most are at least 5%!)
  • Waived financial application processing fee
  • Downpayment support
  • Exemption from stamp duty fees
  • And interestingly, free financial education by AKPK (Agensi Kaunseling & Pengurusan Kredit) to help homebuyers understand the financial nitty-gritty involved in buying a home!

But as always, there are specific criteria for applicants and the properties they’re looking to purchase.

You have to be a Malaysian citizen with a monthly income of no more than RM2,300 and no record of impaired financing in the past 12 months.

To ensure the fund is benefiting those who really need the financial help, this also only applies if you’re buying a property of RM150,000 and below.

The full list of criteria is a little lengthy, so check it out here!

Participating financial institutions include Ambank, BSN, CIMB, Maybank and RHB. Interested applicants can directly contact any of these banks to apply!

 

2. RM100 Micro-Homes For Single Malaysians

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Familiar with Hong Kong’s micro-apartments? Not forgetting the youngsters, a lifeline has also been established for the single adults of the B40 population.

Thanks to DBKL, shophouses on Jalan Tuanku Abdul Rahman are in the midst of being transformed into micro-homes available for rent at only RM100 a month!

By no means will they be luxury 5-star rooms of course.

But with a communal concept featuring shared prayer rooms, launderettes, toilets, pantries and parking spaces for both motorcycles and bicycles, who could possibly ask for more?

At a rental fee of just RM100 no less, this generous housing scheme is aimed at unmarried, low income young Malaysian citizens between the ages of 18 - 28.

So if you fulfill these criteria, have an income of less than RM2,000, work in KL and don’t possess the luxuries of a car and house, these micro-homes might just be the good news you’ve been waiting for all year.

Applicants were able to start their application process online via this link here since August 2019.

 

3. Exemption Of Stamp Duty For First-Time Homebuyers

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We weren’t kidding when we said that Budget 2019 was really focused on helping the B40 bracket with housing. Case in point:

Stamp Duty Exemption:

For first-time homebuyers purchasing properties below RM300,000, you don’t have to pay a single cent of stamp duty!

Don’t know what stamp duty is? We’ve got your back – this helpful article will tell you all you need to know!

Here’s What It Would Normally Cost:

  • 1% for the first RM100,000
  • 2% for subsequent RM100,001 to RM500,000
  • 3% for subsequent RM500,001 to RM1 million
  • 4% for subsequent RM1,000,001 and above

This would mean that if you’re buying a property at RM300,000, you’d have to pay RM5,000 for the stamp duty alone!

If you’re part of the B40 group, this exemption can be a pretty huge help in reducing the hefty upfront costs involved in buying a house.

 

4. 10% Discount on Properties Below RM150,000

What do you get when you combine an initiative to increase home ownership and a need to tackle the enormous amount of excess unsold units in the market?

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Well, that's where the Home Ownership Campaign 2019 (HOC 2019) came in! HOC 2019 was a year-long campaign which ended on 31 December 2019.

But due to overwhelming demand and in a bid to spur the property market's growth, the HOC was further extended – from June 2020 to May 2021!

Similar to the stamp duty exemption mentioned above, this discount applies for SPA agreements signed within this period only.

So if you’ve been eyeing that one unit for the longest time, cross your fingers and hope that it’s part of the campaign!

Yep, that’s right. Because not all developers are obliged to offer the 10% discount. Only those registered with REHDA (Peninsular Malaysia), SHAREDA (Sabah) or SHEDA (Sarawak).

With that said, let’s address a few other major questions you might have:

  1. “Were There Any Affordable Units Under The HOC 2019 Campaign?”

There were a total of 3,384 units, all priced below RM150,000 (what, so cheap!?). These units were targeted specifically for the B40 segment.

  1. “Is The Discount Rate Fixed At 10%?”

No, the 10% discount rate is just the minimum. The government encourages even higher discount rates of 15% or even 20%!

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  1. Does The 10% Discount Apply For All Properties?”

No, only residential properties that are completed or under construction, and governed by the Housing Development Act.

The properties also need to possess a valid developer’s license (DL), advertisement and sales permit (AP) and/or Certificate of Completion and Compliance (CCC).

So confusing right? What are all these? How is one supposed to know which properties are eligible? Fret not, participating developers and projects are all compiled by state in this list here!

 

From B40 To M40

Measures like these can mean the difference between a roof over our heads and living on the streets.

And while they play a huge part in helping low income earners improve their quality of life, there lies the risk of depending too much on the government.

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While this may all sound daunting, small steps matter. Small steps like spending time to improve your financial literacy for example!

 

Whether it be ways to improve your credit score or how to avoid a rental scam, our simple, straightforward guides and resources can help you find out all there is to know about property in Malaysia and more to help you take the first step in breaking out of the B40 zone!

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