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The 2025 First-Time Homebuyer Tax Relief: Is Your Property Eligible?

The 2025 First-Time Homebuyer Tax Relief: Is Your Property Eligible?

Azman Ibrahim

Tax relief details for first-time Malaysian homebuyers (2025-2027).

Tax

Key Takeaways

1

Relief for SPA signed between Jan 1, 2025, and Dec 31, 2027.

2

Two tiers: Up to RM7,000 (for properties up to RM500k) or RM5,000 (for RM500k-RM750k).

3

Property must be a residential home and cannot be rented out for income.

The 2025 First-Time Homebuyer Tax Relief: Is Your Property Eligible?

Owning a home is a defining goal for many Malaysians, but the initial financial burden often feels insurmountable. To address this, the government has introduced a targeted tax relief on housing loan interest specifically for those entering the market for the first time. If you sign your Sales and Purchase Agreement (SPA) between 1 January 2025 and 31 December 2027, you may be eligible for significant annual deductions for three consecutive years according to the Ministry of Finance.

The Two-Tier Relief System

The amount you can claim depends on the purchase price of your home. According to the Budget 2025 tax measures, the relief is split into two categories:

  • Up to RM500,000: You can claim a tax relief of up to RM7,000 per year on the interest paid.
  • RM500,001 to RM750,000: You are eligible for a relief of up to RM5,000 per year.

For a young professional, these deductions directly reduce your taxable income. This means more money stays in your pocket throughout the year rather than being remitted to the tax office through your monthly PCB.

Key Eligibility Rules

While the relief is generous, it comes with specific conditions designed to ensure it benefits genuine first-time homeowners. The property must be a residential home and cannot be used to generate any income. If you plan to rent out the unit immediately, you lose the right to this claim. Do check out LHDN’s guidelines for more information

Added Savings: Stamp Duty

Beyond interest relief, the government continues to offer support through stamp duty exemptions. First-time buyers of properties priced at RM500,000 and below enjoy a 100% waiver on the instrument of transfer and loan agreement. Combining these incentives can lower the entry costs for many young Malaysians, making home ownership a more attainable reality.

Long Story Short

These tax reliefs represent a significant move by the Malaysian government to support homeownership. First-time buyers signing their Sales and Purchase Agreement should carefully review the eligibility rules to ensure they can fully benefit from this program.

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