Most first-time buyer guides tell you to "buy what you can afford." That is safe advice. It is also mediocre advice. Better: buy what generates positive cashflow even if you live in it. Your first property is not just a home — it is the foundation of your financial portfolio. Buy something that would cover its own mortgage if you ever moved out and rented it. That single decision changes your trajectory from "homeowner with a liability" to "property investor with an asset."
This guide covers every advantage available to first-time buyers in Malaysia as of 2026 — stamp duty exemptions, EPF withdrawals, the Skim Rumah Pertamaku 110% financing scheme, loan margin differences, and the exact sequence of steps from DSR check to key collection. The system gives first-time buyers real structural advantages. Know them, use them.
First-Time Buyer Stamp Duty Exemption
This is the largest single financial benefit of buying your first property. The government provides 100% stamp duty exemption on the Memorandum of Transfer (MOT) for first-time buyers purchasing properties priced up to RM 500,000.
The exemption was originally part of Budget 2021 measures and has been extended under Budget 2026 until 31 December 2027. This covers both the instrument of transfer and the loan agreement for residential properties priced at or below RM 500,000.
What you save:
| Property Price (RM) | Normal MOT Stamp Duty (RM) | First-Time Buyer Pays (RM) | Savings (RM) |
|---|---|---|---|
| 300,000 | 5,000 | 0 | 5,000 |
| 400,000 | 7,000 | 0 | 7,000 |
| 500,000 | 9,000 | 0 | 9,000 |
| 600,000 | 12,000 | 12,000 | 0 |
How the normal stamp duty is calculated:
The MOT stamp duty follows a tiered schedule: 1% on the first RM 100,000, 2% on RM 100,001-500,000, 3% on RM 500,001-1,000,000, and 4% above RM 1,000,000. For a full breakdown with worked examples, see our Stamp Duty Guide.
For an RM 500,000 property, the MOT stamp duty is RM 9,000. Combined with the loan agreement stamp duty exemption (also available for first-time buyers on loans up to RM 500,000), the total stamp duty saving can reach RM 11,250 — that is money that stays in your pocket or goes toward renovation.
Eligibility conditions:
- Must be a Malaysian citizen
- Must be your first residential property purchase (no prior property ownership)
- Property price must not exceed RM 500,000
- SPA must be executed within the eligible period
Key takeaway: If you are a first-time buyer and your budget is between RM 450,000 and RM 550,000, staying at or below RM 500,000 saves you up to RM 11,250 in stamp duty. That RM 50,000 difference in purchase price could cost you RM 11,250 in lost exemptions — effectively making the "cheaper" property even cheaper than it looks.
HOC (Home Ownership Campaign) Incentives
The Home Ownership Campaign (Kempen Pemilikan Rumah) is a periodic initiative where the government waives or discounts stamp duty on property purchases, and developers offer additional discounts (typically 10-15% off list price).
When active, HOC provides:
- Stamp duty exemption on MOT for properties priced RM 500,001 to RM 1,000,000
- Minimum 10% discount from participating developers
- Additional stamp duty exemption on the loan agreement
HOC is not always active — it is announced on a campaign basis, usually lasting 6-12 months. The last major HOC (HOC 2.0) ran through December 2025. As of early 2026, HOC 3.0 has not been confirmed — developers including Mah Sing have called for its revival in Budget 2026. Check the Real Estate and Housing Developers' Association Malaysia (REHDA) website for current HOC status.
When HOC coincides with your first-time buyer exemption, you get stacked benefits — the first-time buyer exemption covers properties up to RM 500K, and HOC extends stamp duty relief above that threshold. This is the optimal buying window if you are purchasing from a developer.
Loan Margin: The First-Time Buyer Advantage
Your Loan-to-Value (LTV) ratio — or margin of financing — determines how much down payment you need. First-time buyers get the most favourable terms.
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| Property Number | Maximum LTV | Minimum Down Payment |
|---|---|---|
| 1st property | 90% | 10% |
| 2nd property | 90% | 10% |
| 3rd property onwards | 70% | 30% |
Down payment comparison by property price and margin:
| Property Price (RM) | Down Payment at 90% LTV (RM) | Down Payment at 80% LTV (RM) | Down Payment at 70% LTV (RM) |
|---|---|---|---|
| 300,000 | 30,000 | 60,000 | 90,000 |
| 400,000 | 40,000 | 80,000 | 120,000 |
| 500,000 | 50,000 | 100,000 | 150,000 |
| 600,000 | 60,000 | 120,000 | 180,000 |
The difference between 90% and 70% LTV on an RM 500,000 property is RM 100,000 in additional upfront capital. This is why your first two property purchases are structurally the easiest — and why wasting that 90% LTV on an overpriced, cashflow-negative property is a strategic error.
Some banks offer up to 95% financing for first-time buyers on properties below RM 500,000. This brings the down payment on an RM 400,000 property down to just RM 20,000. Ask your banker about this — it is not widely advertised but it exists.
EPF Account 2 Withdrawal for Property Purchase
The Employees Provident Fund (KWSP) allows members to withdraw from Account 2 (Akaun Sejahtera) to fund a property purchase. For first-time buyers, this is often the single largest source of down payment funds.
How much can you withdraw?
For a property purchase withdrawal, the maximum withdrawal is:
Maximum = Purchase Price - Financing Amount
Or your Account 2 balance, whichever is lower.
Example: You are buying an RM 450,000 property with 90% financing (RM 405,000 loan). The gap is RM 45,000. If your Account 2 has RM 60,000, you can withdraw RM 45,000. If it has RM 30,000, you can withdraw RM 30,000.
Key rules per KWSP:
- You must be below 55 years old
- The property must be residential
- EPF allows withdrawal to help finance up to two residential properties
- For reducing or redeeming an existing housing loan, see the loan reduction withdrawal
- A housing loan instalment withdrawal option is also available for members facing financial difficulty
- Withdrawal application takes approximately 2-4 weeks to process
For the complete rules, limits, and financial analysis of whether you should use EPF for property, see our detailed EPF Withdrawal for Property guide.
Key takeaway: EPF Account 2 can cover most or all of your down payment on a first property. But consider the opportunity cost — EPF has returned 5%-6% annually in recent years. If your property investment returns exceed that (rental yield + capital appreciation), the withdrawal makes financial sense. If not, you are better off leaving the money in EPF.
Skim Rumah Pertamaku (SRP) — 110% Financing
Skim Rumah Pertamaku (My First Home Scheme) is a government initiative administered by Cagamas Berhad that provides up to 110% financing for first-time home buyers. The extra 10% is intended to cover upfront costs — legal fees, stamp duty, valuation, and moving expenses.
Eligibility:
| Criterion | Requirement |
|---|---|
| Age | 21 to 45 years old |
| Citizenship | Malaysian citizen |
| Property price | Up to RM 500,000 |
| Individual income | Not exceeding RM 5,000/month per applicant |
| Combined income (joint) | Not exceeding RM 10,000/month |
| Property type | First residential property — for owner occupation, not investment |
| Prior ownership | Must not own any residential property |
| CCRIS | Clean record — no adverse credit history |
| DSR | Total financing obligations must not exceed 60% of combined net monthly income |
How it works:
Cagamas provides a guarantee to the participating bank for the portion above 90% LTV. This means the bank lends you up to 110% of the property price — you do not need any down payment at all. The bank's risk on the 90%-110% tranche is covered by Cagamas.
Participating banks: Most major banks participate, including Maybank, CIMB, RHB, AmBank, Bank Islam, and others. Check the Cagamas SRP portal for the current list.
The trade-off: With 110% financing, you start with negative equity — you owe more than the property is worth. If property values stagnate or dip in the first few years, you cannot sell without bringing cash to the table. This is acceptable if you plan to hold long-term (7+ years). It is risky if your plans are uncertain.
Also: The income cap of RM 5,000/month per individual (or RM 10,000/month combined for joint applicants) means this scheme targets the lower to middle-income segment. If you earn above this threshold, you do not qualify — but you also probably have enough savings for a 10% down payment without the scheme.
What It Actually Costs to Buy Your First Property
Beyond the purchase price and down payment, first-time buyers are often shocked by the total upfront cash required. Here is a realistic breakdown for an RM 450,000 property at 90% LTV:
| Cost Item | Amount (RM) | Notes |
|---|---|---|
| Down payment (10%) | 45,000 | May be partially covered by EPF withdrawal |
| SPA legal fees + SST | 5,963 | 1.25% of RM 450K + 6% SST |
| Loan agreement legal fees + SST | 5,366 | 1.25% of RM 405K + 6% SST |
| MOT stamp duty | 0 | First-time buyer exemption (under RM 500K, until 31 Dec 2027) |
| Loan stamp duty | 0 | First-time buyer exemption (under RM 500K, until 31 Dec 2027) |
| Valuation fee | 400 | May be waived by bank |
| Disbursements (land search, registration) | 1,500 | Estimate |
| Total upfront cost | ~RM 58,229 |
Without the first-time buyer stamp duty exemptions, you would pay an additional RM 11,250 (RM 9,000 MOT + RM 2,250 loan stamp duty). The exemption saves you a significant chunk.
For a detailed breakdown of legal fees at different price points, see our Legal Fees Guide.
What about renovation?
Budget RM 20,000 – RM 50,000 for basic renovation of a sub-sale unit (painting, flooring, kitchen cabinet, bathroom refresh). For a new developer unit, you may need RM 30,000 – RM 80,000 for ID fit-out (built-in wardrobes, kitchen, lighting). This is a cost many first-time buyers forget when they sign the SPA at the maximum of their budget.
Step-by-Step: From Decision to Keys
Here is the exact sequence a first-time buyer should follow. Do not skip steps or change the order.
Step 1: Check your DSR (Before anything else)
Calculate your Debt Service Ratio — the key metric under Bank Negara's Responsible Lending Guidelines — using our DSR Guide. Know your maximum loan amount before you look at a single property. Shopping for properties you cannot afford wastes time and creates emotional attachment to things outside your budget.
Step 2: Get loan pre-approval (Week 1-2)
Approach 2-3 banks with your documents (IC, payslips, EPF statement, bank statements, EA form). Get a pre-approval letter stating the maximum loan amount and indicative rate. This takes 3-5 working days per bank.
Step 3: House hunt with a budget ceiling (Week 2-6)
Now that you know your maximum price, search within that range. Factor in monthly costs beyond the mortgage — maintenance fees for strata properties can add RM 200-500/month. Use the Cashflow Calculator to model total monthly cost.
Visit at least 10-15 properties before making an offer. Check the unit condition, ask about rental rates in the building (this tells you the property's income potential if you ever move out), and verify the strata title has been issued.
Step 4: Make an offer and sign the booking form (Week 6-7)
If buying sub-sale: negotiate with the seller and agent. Pay a booking deposit (typically 2-3% of purchase price or RM 5,000-10,000). This is usually refundable if the loan is not approved, depending on the terms of the booking form — read it carefully.
If buying from a developer: sign the booking form and pay the booking fee (RM 1,000-5,000). Developer sales are more standardized.
Step 5: Sign the SPA (Week 7-9)
The Sale and Purchase Agreement is the binding legal contract. Your lawyer (or the developer's panel lawyer) prepares it. For sub-sale, this follows the standard format under Schedule H (strata) or Schedule G (landed) of the Housing Development Act.
Pay the balance of the 10% deposit at SPA signing (minus the booking amount already paid). For the stamp duty calculation on your SPA, see our Stamp Duty Calculator.
Step 6: Loan application and approval (Week 7-12)
Submit formal loan applications to your pre-approved banks. The bank orders a valuation, processes your application, and issues a Letter of Offer. Review the offer carefully — check the rate, lock-in period, penalty terms, MRTA requirements, and any special conditions.
Step 7: Legal completion (Week 10-16)
Your loan lawyer prepares the financing documentation. The SPA lawyer completes the transfer process. Documents are registered with the land office. For sub-sale, the seller's existing loan must be discharged — this can add 4-8 weeks.
Step 8: Key collection and defect inspection (Week 14-20)
For developer purchases: conduct a defect inspection within the Defect Liability Period (typically 24 months from VP/vacant possession). Document everything. For sub-sale: do a thorough check before the balance purchase price is released to the seller.
Common First-Time Buyer Mistakes
These errors are preventable. Every one of them destroys cashflow or creates unnecessary financial stress.
1. Buying at the absolute maximum of your budget.
If your DSR allows a RM 500,000 property, do not buy at RM 500,000. Buy at RM 400,000-450,000. Leave a buffer for rate increases, income disruption, or unexpected costs. The OPR can rise. Your company can restructure. Having your DSR at 63% instead of 65% is the difference between sleeping well and sweating every month-end.
2. Ignoring maintenance fees.
On a strata property (condo, apartment, serviced residence), maintenance fees run RM 0.25 – RM 0.65 per square foot per month. On a 1,000 sqft unit at RM 0.45/sqft, that is RM 450/month — RM 5,400/year that comes out of your pocket regardless of whether the unit is occupied. For the full breakdown, see our Maintenance Fee Guide.
3. Not budgeting for renovation.
A bare developer unit needs RM 30,000-80,000 in fit-out. A sub-sale unit needs at least RM 20,000-50,000 to bring it to liveable or rentable standard. If you spend every ringgit on the down payment and legal fees, you will be living in an empty shell or taking a personal loan at 8-12% to fund renovation. Factor this in from day one.
4. Choosing location based on aspiration, not data.
First-time buyers often target "prime" areas — Mont Kiara, KLCC, Bangsar — because of perceived prestige. These areas have high entry prices, high maintenance fees, and rental yields of 3-4%. A property in Setia Alam, Rawang, or Semenyih at RM 300,000-400,000 with 5-6% rental yield will build wealth faster. Buy on numbers, not on postcode.
5. Skipping the tenancy research.
Before buying, check what similar units in the same building rent for. Ask the building management office about vacancy rates. Post a test listing on Mudah or PropertyGuru at the expected rental rate and see how many enquiries you get. If you ever need to rent the unit — whether by choice or circumstance — you need to know the property can service itself. Use our Home Loan Calculator to see what monthly instalment you will pay, and compare it against achievable rent.
6. Not checking the developer's track record.
For new launches: research the developer's history. Have previous projects been completed on time? Are there defect complaints in forums? Is the developer financially stable? A stalled or abandoned project is the worst-case scenario for a first-time buyer who has committed 10% of their life savings as a deposit.
The Cashflow-First Mindset
Here is the mental model that separates first-time buyers who build wealth from those who just buy a place to live:
Before buying, answer this question: If I moved out tomorrow and rented this property, would the rent cover my mortgage, maintenance fee, and annual costs?
If the answer is yes — or close to yes — you have a property that works as both a home and an investment. If the answer is a resounding no (rent covers only 60% of costs), you have a pure liability that traps capital and generates negative cashflow the moment your circumstances change.
You do not need to buy an "investment property" as your first purchase. You just need to buy a property that could function as one. That means: reasonable price relative to rental rates, manageable maintenance fees, good tenant demand in the area, and a loan structured at a sustainable DSR.
Your first property sets the foundation. If it generates positive cashflow when rented, it becomes the launchpad for your second property — the rental income helps your DSR, the equity builds over time for cash-out refinancing, and you have a proven asset on your balance sheet. If it generates negative cashflow, it becomes an anchor that drags down every subsequent property decision.
Choose wisely. The numbers do not lie.
Sources & Further Reading
- BNM — LTV Guidelines
- Budget 2026 — Stamp Duty Exemptions Extended to 31 Dec 2027
- KWSP — Housing Withdrawal
- KWSP — Buy House Withdrawal
- Cagamas — Skim Rumah Pertamaku (SRP)
- BNM — OPR Decisions
- Budget 2026: First-Time Homebuyer Incentives — stamp duty exemption extension to Dec 2027
- CAGAMAS Housing Guarantee Scheme — mortgage guarantee for first-time buyers
- LPPSA (Public Sector Home Financing) — government servant housing loan guidelines
- Bank Negara: Responsible Lending Guidelines — DSR limits and eligibility criteria