B40 and M40: What Are The Housing Schemes Available For You?

PropertyGuru Editorial Team
B40 and M40: What Are The Housing Schemes Available For You?
No one likes being categorised and put into boxes. Like it or not though, all Malaysian citizens are classified into three income groups: Bottom 40% (B40), Middle 40% (M40) and Top 20% (T20).
With these income groups acting as the basis for various government initiatives, these terms shouldn’t be very foreign to you.
But have you ever stopped to wonder how EXACTLY these income groups are classified?

B40, M40 Or T20: Where Do You Belong?

To be able to put yourself onto the map of income groups, you’ll first have to understand how (and who) is doing the classification.
Malaysians are classified into their respective income groups according to median monthly income per household.
This is taken from official statistics gathered by the Department of Statistics’ (DOSM) Household Income and Basic Amenities Survey Report 2019.
As median monthly income will typically increase or decrease every year, the benchmark for each income group will change as well. So contrary to what you may have thought, it’s not a fixed number!
But no need to dig through the report. We’ve done the work for you in the table below!
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In short, if your household brings in a monthly median income of below RM4,850, you’re classified under the Bottom 40% (B40).

Surely, Median Household Income Is Different In Each State?

Of course, the reality is that other factors such as urbanisation have to be taken into context as well.
What may be plenty for a small household in Kelantan, will no doubt be stretched to its limits for a household of the same size in Kuala Lumpur, given the stark difference in living expenses.
As stated in the DOSM report earlier, the median income at state level paints a pretty clear picture: The highest median income is W.P. Kuala Lumpur with RM10,549, followed by W.P. Putrajaya with RM9,983 and Selangor with RM8,210.
Now, comparing the top 3 to the lowest 3 (median incomes by state level) would be Kelantan with RM3,563, followed by Perak with RM4,273 and Sabah with RM4,235.

What Are My Housing Choices Based On My Income Level?

With properties only getting more unaffordable and salaries failing to keep up, housing choices for the B40 group can be limited, to say the least.
However, we did publish a piece on the existing housing initiatives aimed to help the B40 group secure their own home.
From RM100 micro-homes to 10% discount for properties below RM150,000 – it’s reassuring to know there are efforts to help this segment of the rakyat.
But, what about the M40 homebuyers?
For those fringing near the B40 threshold, yet unable to receive the benefits B40 homebuyers are entitled to, it can seem like help is unattainable despite being just within arm’s reach.
Well, below are some of the housing schemes aimed at assisting the B40 and M40 groups!

1) MyHome Program Perumahan Rakyat by Bank Simpanan Nasional (BSN)

In order to assist more Malaysians with the purchase of their first home, BSN has come up with a scheme that aims to support those who are self-employed with the financial aspect.
We all know that it can be more challenging when it comes to applying for a home loan due to the ‘self-employed’ status, what more with the highly uncertain conditions brought about by COVID-19.
This scheme helps out with the financing of the individual’s first home (and for own stay only). It comes with a range of benefits, notably:
  • Financing of up to 100% (inclusive of the mortgage insurance, MRTA or MRTT)
  • The stamp duty will be covered under this scheme
  • A minimum income of only RM1,000 per month is required
  • You can use either an individual or joint home loan in this scheme, thus allowing you the option to access more financing, if you so choose

2) Rent-to-Own (RTO) Scheme

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Before you buy a car, you bring it out for a test drive right? Imagine being able to “test-stay” in a property before buying it! That’s the concept of this scheme that was tabled in Budget 2021.
Through this, homebuyers who lack the financial capability to pay that massive 10% down payment (or may not qualify for loan financing) are still able to get their hands on a home of their own.
Here’s what it entails: Instead of a down payment, buyers can choose to enter a lease, and rent the property for a period of up to 5 years.
After the first year, the buyer can choose whether or not they’d like to purchase the property, and get this – for the amount the property was originally priced when the lease was first signed!
Just remember, the RTO scheme is only available for first-time homebuyers, and for properties priced RM500,000 and below.

3) Bank Negara Malaysia’s (BNM) RM1 Billion “Fund For Affordable Homes”

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First introduced in 2019, this financing scheme by BNM has recently extended its reach to help even more buyers better afford homes. Here’s what the fund entails:
  • 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
  • Down payment support
  • Exemption from stamp duty fees
  • And interestingly, free financial education by AKPK (Credit Counselling and Debt Management Agency) to help homebuyers understand the financial nitty-gritty involved in buying a home
Now, this is where the recent enhancements come in. Previously, buyers were only eligible if their monthly household income did not exceed RM2,300, and the property they were looking to purchase was no more than RM150,000.
Now, the monthly household income has been raised to RM4,360, while the maximum property price has been increased to RM300,000!

4) Youth Transit Housing (MyTransit) by KPKT

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The Youth Transit Housing Scheme is a scheme by the Ministry of Housing and Local Government (KPKT) aimed at both the single and married youths in the B40 and bottom-M40 range.
Compared to most of the other schemes we’ve mentioned here, the MyTransit scheme helps youths by providing affordable studio apartments for rent instead of purchase.
Under this scheme, 2,010 studio home units are to be built in Mukim Batu and Kepong, Kuala Lumpur, with the estimated completion date sometime in 2022.
The rental rate for these homes are promised to be at least 20% cheaper than market prices.
Interestingly, there’s also a “forced savings” element. This means that a percentage of the monthly rental will be set aside and returned to the tenant as a lump-sum after their maximum five-year stay.
Find out more on the official website here!

Bonus: Home Ownership Campaign (HOC)!

*HOC has ended on 31 December 2021
We’ve talked a lot about the HOC campaign here on PropertyGuru. If you still aren’t familiar with it, it was a campaign which aimed to support homebuyers looking to purchase property, reduce residential overhang, and encourage growth in property buying.
Some of the incentives it had, which helped to achieve this, include:
  • 100% stamp duty exemption on properties up to RM1 million
  • Partial stamp duty exemption on properties up to RM2.5 million
  • Minimum 10% discount on property purchase price
Scheduled to end in June but was extended till 31st December 2019, it was extended once more from June 2020 till December 2021. Read this article if you’re keen to find out whether purchasing a HOC project is the right choice or not!
Having these schemes and campaigns in place can mean a world of difference for many. Remember though, that while they may save you some money, discounts and incentives shouldn’t be your main priority.
The most important thing: ALWAYS make sure you have the financial capability to actually afford the property in the first place!
Relevant Guides:
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