How Does Budget 2020 Affect You In Buying Your First Property?
At the recent Budget 2020 presentation, the government will collaborate with financial institutions to introduce a Rent To Own (RTO) financing scheme. Now, what is RTO? Our Finance Minister, Lim Guan Eng said that a Rent To Own (RTO) financing scheme has been set up for those unable to afford the initial 10% deposit and access financing in buying their first property. Under the RTO scheme, financing 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.
How does this RTO scheme works? RTO is a scheme for purchase of first home up to RM500,000 property price. First thing is that applicant will rent the property for up to five years and after the first year, the tenant will have the option to purchase the property based on the price fixed at the time the tenancy agreement is signed.
And the good news is – the government will provide stamp duty exemptions on the instruments of transfer between the developer and financial institution, and between financial institutions and the buyer under the RTO scheme!
Youth Housing Scheme Extended
On the other good news, the government will extend the Youth Housing Scheme administered by Bank Simpanan Nasional (BSN) from Jan 1, 2020 till Dec 31, 2021 to assist youths in purchasing their first property.
The Youth Housing Scheme also offers a 10% 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.
High Approval Rate For The ‘Fund for Affordable Home’ Scheme
Not forgetting the lower-income groups, the government has launched ‘Fund for Affordable Home’ by Bank Negara in January this year to assist on purchasing their first home which was for properties that are priced up to RM150,000 at a concessionary interest rate up to 3.5%. The ‘Fund for Affordable Home’ scheme, for households with maximum income of RM 4,360, being the threshold income for B40, the criteria were expanded on Sept 1,2019 to include property priced up to RM 300,000. From the data presented, the result of Fund for Affordable Home scheme seems to be positive with a high approval rate of 77.9% as of September 2019.
The Government is doing their part to assist many different income groups to achieve their goal in purchasing their first property, which can be clearly be seen in the recent Budget 2020 presentation. So, why not take this opportunity to get your own property, build your dream home by utilizing schemes our Government is offering. To widen up your choices, a new property project locating at Subang, Damaisuria Seiring Residensi, is currently open up for sale.
You may visit their showroom to get an understanding on their unique concept & assistance from the agents if you need more information regarding the property.
Does the scheme presented in Budget 2020 trigger your interest to start looking for a new home? Let’s talk!