Low-cost homes are designed to provide affordable, accessible housing for Malaysian families with more limited incomes. That means there are some special rules and regulations around buying and selling these homes.
Now, there are already many types of affordable housing policies in Malaysia. Over in Selangor, a good share of these homes come under the Rumah Selangorku initiative.
Since these houses are designed to support low-income families taking that first step onto the housing ladder, Selangor has some policies in place to make sure it stays that way.
Understanding Rumah Selangorku
This initiative was introduced back in 2014, and is managed by the Selangor State Government. The intention was to provide affordable housing choices to the residents of the state.
Lembaga Perumahan dan Hartanah Selangor (LPHS) – the local housing association – is in charge of overseeing this initiative.
RSKU works by partnering with developers to construct a specified number of affordable housing units within the state.
Unlike other affordable housing initiatives such as PR1MA, Rumah Selangorku is a compulsory policy for all qualifying developments to ensure a share of affordable housing.
That means there’s no way for developers to avoid this; if you plan to build a qualifying development in Selangor, then you’re already subject to the policy.
What Low-Cost Property Does It Cover?
There are five types of units under this initiative, that apply across the state. No matter if you’re applying for Rumah Selangorku Setia Alam or Rumah Selangorku Cyberjaya, the unit types should match across the properties.
Type A
RM42,000
700 sq ft
700 sq ft
Type B
RM100,000
750 sq ft
750 sq ft
Type C
RM150,000
800 sq ft
1,000 sq ft
Type D
RM200,000
900 sq ft
900 sq ft
Type E
RM250,000
900 sq ft
N/A
What Is The Eligibility For Rumah Selangorku?
As you can probably guess with an affordable home initiative, there are some important eligibility criteria to make sure you’re the kind of demographic that the project is aimed to help.
- Applicants aged 18+
- Malaysian citizen and a resident of Selangor
- Maximum household income (married couple) not over RM 10,000 per month
- Maximum household income (single person) not over RM 3,000 per month
- One offer per household
- First-time homebuyer
Eligibility is also split depending on your income level, as it’ll determine which house category you can apply for:
Household income |
Category eligibility |
|
Up to RM3,000
|
Type A
|
|
RM3,000 – RM10,000
|
Tybe B, C, D, E
|
Applying For Rumah Selangorku
If you meet the eligibility criteria above, then you can apply for Rumah Selangorku through the Sistem Pendaftaran Permohonan Hartanah Negeri Selangor website.
Remember: LPHS is the only legitimate avenue to access these properties! The key documents you will need are:
- Copies of the applicants’ NRIC
- Birth certificates of children/dependents (if applicable)
- Copy of marriage certificate or similar (if applicable)
- Confirmation letter from employer or Commissioner of Oaths for single, self-employed applicants (if applicable)
- Payslips, bank statements, or income verification from Commissioner of Oaths (if applicable)
- Utility bill
- CCRIS credit reports
The final confirmation is based on a merit award system. That means you might be eligible for a property, but still not be awarded the rights to buy one if there’s a waiting list with more ‘in need’ applicants.
Applications are ‘active’ for two years from the point of submission, and you may be granted permission to buy at any time during that period. If your application expires, you must apply again. Don’t worry, applications are free!
If you’re offered a Rumah Selangorku property, but reject it, then you are no longer able to apply for a two-year period.
Owning, Buying, Or Selling Low-Cost Property In Selangor
Once you own your Rumah Selangorku property, you can’t just do whatever you want with it! No, you cannot buy a cheap property then unscrupulously rent it out for a big return.
These low-cost housing initiatives are designed to do what they say – provide affordable housing to citizens of limited income. So, there are certain conditions you must follow:
- Property cannot be sold within five years of purchase
- Property cannot be transferred (including love transfer) within five years of purchase
- Owners may not rent out the property
While you’re not banned from selling off a Rumah Selangorku property, it cannot be done within five years of the signing of the Sale and Purchase Agreement (SPA).
That kind of clause is common in any low-cost housing policy in Malaysia, so be sure to keep an eye out for that if you don’t want to get in trouble.
Alongside the moratorium period, there is a rule applied in Selangor around the sale of any property designated as ‘low-cost’.
The transfer of ownership of any such property can only be granted by approval of Lembaga Perumahan dan Hartanah Selangor (LPHS). That means there are some further restrictions on sale:
- Purchaser must be 18+
- Must be a Malaysian citizen
- Neither applicant or spouse owns a home in Selangor or Klang Valley
- Must not have household income above RM10,000
This can cause issues in cases where appropriate steps are not taken. For example, you want to purchase a home, so you go through all the usual steps and come to a fantastic deal with the owner.
Your lawyer submits the SPA to the Land Office as part of the transfer of ownership, only to have the Land Office come back months later and advise that this is a low-cost house, and no permission from LPHS was given.
That would be quite the setback, as all the time and effort by both the seller and buyer would have been wasted!
This could be particularly troublesome if the buyer’s income was above the threshold for approval, in which case even after the problem was identified, LPHS would still NOT grant approval for the sale.
If in doubt, you should check the original SPA documents, and the registration with the Land Office, to ascertain if a property is designated as a low-cost housing unit.
Other Considerations With Low-Cost Homes
There are a few other considerations to remember when buying low-cost homes. Don’t just factor the house price itself into your budget.
For starters, there are a range of other costs, from stamp duty through to legal fees. Always take time to work out a comprehensive budget before assessing the affordability of a house purchase.
The second thing to consider about low-cost homes in Selangor, is how the restrictive sales policy can impact your own ability to sell it at a later point. With strict eligibility criteria, your pool of potential buyers is equally restricted.
The low-cost housing regulations are designed to ensure low-income households can buy property. But it does mean that these property assets aren’t as transferable as some alternative properties.
That can impact the desirability of Ruman Selangorku homes, when considering the lifetime property journey of owners.
Perceptions of desirability may also undermine some people’s attitudes to these properties. There are those who argue that the homes under Rumah Selangorku are less desirable, due to their locations.
There are still those who believe that affordable areas tend to have basic or no amenities, with less development potential in the future.
Rumah Selangorku is an admirable initiative, with an important focus on affordable housing for low-income groups. That’s not to say it’s without its challenges however.
The true success of this programme may well be down to how buyer perceptions evolve in coming years, and how these properties go on to trade on the secondary market.
Want to find out more about selling a property in Malaysia? Then you’re going to want to read up more on the fees and taxes that are involved when you put your home up for sale.
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