First-Time Home Buyer Guide

What this first-time home buyer guide covers

Buying a first home means facing terms, documents and dates that are all new. This page focuses on what actually differs for you rather than repeating the whole process.

The first-time buyer stamp duty exemption

This is the component that saves the most money. Transfer stamp duty and loan agreement stamp duty may be exempted for an eligible first-time buyer, up to a prescribed value cap. On a property at RM500,000 that is a large difference in the cash you need to have ready.

The key point: it has to be claimed, and the conditions can change. Do not budget on the exemption until your eligibility is confirmed.

First-time home buyer cost comparison with and without the exemption

Sequencing your funds

• Deposit. Normally 10% of the purchase price, inclusive of anything already paid to the agent.
• Legal fees and stamp duty. These have to be set aside separately from the deposit.
• EPF Account 2 withdrawal. Usable but it takes time. Start early.
• Costs after the keys. Utility deposits, furniture, renovation, maintenance charges.

The most common first-time home buyer mistakes

• Paying a large deposit to the seller or agent before a title search is done
• Treating loan pre-approval as if the loan is already approved
• Budgeting only for the deposit and leaving out legal fees and stamp duty
• Opening new credit facilities while the loan application is being processed
• Signing a booking form without reading the cancellation terms
• Relying on the exemption without confirming eligibility

Spending every ringgit of savings on the deposit is the most common. With nothing left for stamp duty, you end up borrowing at a higher rate a few weeks later.

Second, not checking eligibility for the stamp duty exemption before fixing a budget. Buyers who assume they qualify and do not, face a large gap.

Third, buying a property priced just above the exemption ceiling. A small difference in price can mean losing the exemption entirely, and that changes the whole calculation.

Buying from a developer or buying subsale

Buying from a developer and buying subsale are two different processes. A developer purchase involves a regulated standard agreement and staged payments tied to construction progress. A subsale involves an existing title, with a history and possibly a charge or caveat that has to be resolved. We handle the two routes separately: buying from a developer and subsale conveyancing for buyers.

What a first-time home buyer should check before signing

• The name on the title matches the seller’s name
• No caveat or restriction in interest blocking the transfer
• Any existing charge and how it will be discharged
• Quit rent and assessment are not in arrears
• For strata, that maintenance charges are not in arrears

A practical order for the money

The money is not needed all at once. The first stage is the earnest deposit to the agent and the balance of the deposit on signing, usually around 10% of the price less the earnest money.

The second stage is stamp duty and legal fees, payable before stamping and registration. That falls several weeks after signing, not on the same day.

The third stage is the cost after handover. First-time buyers often forget this stage because all the attention goes to the deposit.

Questions worth asking before signing

The full list of costs from today until the day I get the keys.

Which costs fall at signing and which a few weeks later.

Whether I qualify for the stamp duty exemption, and what forms are needed.

What the completion period is, and whether it is realistic for my bank.

What happens if my loan is rejected after signing.

Frequently asked questions about first-time home buyer