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This guide walks through how the HOC works, including the benefits and the types of property which are eligible.
Even with the HOC, buying a home is a big investment. And it can get even more costly if you need to send funds to Malaysia from overseas to pay for your new property. To help you get the best deal on international payments, we’ll also highlight Wise as a smart, cheap way to move your money across borders.
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Before we get started on the HOC let’s take a look at an example of the costs of sending payments abroad using Wise compared to a competitor - PayPal.
As you can see with this example, sending money with Wise works out better value than using PayPal. Although PayPal has a low headline fee, their currency conversion costs are wrapped up in the exchange rate used.
When you’re sending an international payment, it’s crucial to check both the fees and the exchange rate available.
If you’re making a high value international payment towards your new property in Malaysia, you can make big savings by choosing the right payment provider.
Check out the secure, fast, low cost international payments available from Wise.
The Home Ownership Campaign was originally planned to end in 2019. However, it has now been reintroduced from 1 June 2020 through to 31 May 2021.²
The Home Ownership Campaign is intended to make it easier for Malaysians to buy a residential property - and at the same time, reduce the number of extra housing units which are currently unoccupied. All Malaysian citizens can benefit from the HOC discounts, and can buy as many eligible properties as they wish. There are, however, fairly strict criteria about which properties are covered by HOC - more on that later.
Under the Home Ownership Campaign, eligible properties benefit from a discount of at least 10% from the developer, and may have stamp duty waived or reduced depending on the value of the property. Here’s what you need to know about stamp duty:²
Instruments of transfer:
|Value of property||Normal stamp duty||HOC stamp duty|
|First MYR 100,000||1%||Exempt|
|MYR 100,001 - MYR 500,000||2%||Exempt|
|MYR 500,001 - MYR 1,000,000||3%||Exempt|
|MYR 1,000,001 - MYR 2,500,000||4%||3%|
Instruments on securing loan:
|Loan amount||Normal stamp duty||HOC stamp duty|
|Up to MYR 2,500,000||0.5%||Exempt|
In order to be part of the HOC campaign, developers must offer a discount on the property cost of at least 10%. However, the discount can be higher than this, meaning you could save even more on some purchases. It’s worth noting, though, that not all properties will be covered by HOC. Developers might choose not to take part in the scheme, so you’ll need to check before proceeding with a purchase.
Let’s take a look at what the HOC means in practise, using an example of a home valued at MYR 450,000.
|Full cost of property||MYR 450,000|
|Down payment (450,000 x 10%)||MYR 45,000|
|Stamp duty loan (450,000 x 0.5%)||MYR 2,250|
|Stamp duty MOT (100,000 x 1% + 350,000 x 2%)||MYR 8,000|
|Monthly Repayment (4.5% @ 30 years loan, 90% of purchase price)³||MYR 2,052|
|Discounted cost of property (450,000 x 90%)||MYR 405,000|
|Down payment (405,000 x 90%)||MYR 40,500|
|Stamp duty loan (exempt)||MYR 0|
|Stamp duty MOT (exempt)||MYR 0|
|Monthly Repayment (4.5% @ 30 years loan, 90% of purchase price)³||MYR 1,847|
In the case above, you could save around MYR 15,000. Not bad, right?
If you have been living or working overseas and hold funds abroad, you might need to use international transfers to pay for your new Malaysian property.
Cut the costs of sending and receiving international transfers with Wise.
You can send money to 70+ countries with low, transparent fees, using the mid-market exchange rate with no markup. Compared to Malaysian banks, it can be up to 4 x cheaper to send money abroad with Wise. Most likely much faster as well.
Moreover, you can receive money to a Wise multi-currency account from the UK, U.S., Australia, New Zealand and any Eurozone country, just as if you had a local bank account in those countries. Hold your money in 50+ different currencies, and switch it using the mid-market rate whenever you want to.
To send money with Wise,
- Create a free account
- Choose an amount to send
- Add recipient’s bank details
- Verify your identity
- Pay for your transfer by bank transfer or debit/credit card
And that is it! You can track your transfer in your account and your recipient will also be notified when a transfer reaches them.
To be eligible for the benefits of the HOC you must be a Malaysian citizen. ²
The properties covered by the HOC must be residential, including apartments, condos and landed houses. You can’t buy commercial buildings, and sales must be on the primary market to qualify, meaning you’ll have to be buying from a developer rather than a resale property.
There are a few other eligibility criteria to consider - here are the key points to know:²
- The developer must offer a discount of at least 10% of the value of the property
- The price of the home must be MYR300,001 - MYR2,500,000 prior to the developer discount being applied
- The property must be ‘residential’ and not for commercial activities
- The sale and purchase agreement must be concluded between June 1 2020 and May 31 2021
You can find the full eligibility details online - check out the REHDA (Real Estate and Housing Developers’ Association) website for more information and a really useful FAQ section about the Home Ownership Campaign.²
Buying a home is never going to be cheap. But thanks to the HOC it is now more affordable to get onto the property ladde. If you’re sending money from overseas to make your property purchase, don’t forget to check out Wise.
- Wise | Compare exchange rates(August 3 2020 at 15:25 (GMT+3))
- REHDA Malaysia | HOC 2020-2021
- LoanStreet | Home Loan & Stamp Duty Calculator
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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