KUALA LUMPUR: The government will collaborate with financial institutions to introduce a Rent To Own (RTO) financing scheme to assist those unable to afford the initial 10 per cent deposit and access to financing to buy homes.
Under this scheme, financing of up to RM10 billion will be provided by the financial institutions with the support from the government via a 30 per cent or RM3 billion guarantee.
Finance Minister Lim Guan Eng, in tabling the 2020 Budget, said the RTO scheme applies to the purchase of first homes, with a property value of up to RM500,000.
“Under this scheme, the applicant will rent the property for up to five years and after the first year, the tenant will have the option to purchase the house based on the price fixed at the time the tenancy agreement is signed,” he said.
He said the government would provide stamp duty exemptions on the instruments of transfer between the developer and financial institution, and between financial institutions and the buyer in this scheme.
To reduce supply overhang of condominiums and apartments amounting to RM8.3 billion in the second quarter of 2019, he said the government will lower the threshold on high rise property prices in urban areas for foreign ownership, from RM1 million to RM600,000 in 2020.
“To assist the youth in purchasing their first home, the government will extend the Youth Housing Scheme managed by Bank Simpanan Nasional from Jan 1, 2020 until Dec 31, 2021.
“The scheme also offers a 10 percent loan guarantee through Cagamas to enable borrowers of full financing and RM200 monthly installment assistance for the first two years limited to 10,000 home units.”