The Home Ownership Campaign (HOC) is a housing program designed to help Malaysians purchase their first home in Malaysia, and to boost the Malaysian property market. The program first started running in the year 2019 and was ended in the same year, but has since returned to help boost the Malaysian property market.
Although the HOC has been running for a while now, there are many out there who are still unsure about what the Home Ownership Campaign is all about and how it could benefit them. So let’s take a look at all the nitty-gritty details of HOC.
What is Home Ownership Campaign (HOC)?
The Home Ownership Campaign is a program that was originally designed to kill two birds with one stone. The first and original purpose of the HOC program is to decrease the amount of property overhang in the country.
The program proved to be successful in this aspect, as the Malaysian market saw a slight decrease of 5.1% in property overhang between the years 2018 and 2019. As of the year 2020, the amount of property overhang further dropped from 30,664 units in 2019 to 29,565 units in the year 2020.
The secondary purpose of HOC is to help increase home ownership and boost the property market in Malaysia. In order to do this, the HOC program offers several discounts to the property buyers which we will list out in the below section.
How Long Will the Home Ownership Campaign (HOC) Run?
The House Ownership Campaign (HOC) is a government-run initiative that was launched on 1st Jan 2019 and was originally supposed to end on 30th June 2019. However, due to the clear success of the program, the government Housing and Local Government Minister Zuraida Kamaruddin, announced that the HOC program would be further extended until December 2019.
As the COVID-19 pandemic struck the country, the property market then took a great hit. Hence in order to boost the nation’s recovery, the Prime Minister then reintroduced the HOC program to Malaysia under the Short-Term Economic Recovery Plan (PENJANA).
The newly reintroduced HOC program was supposed to run from 1st June 2020 to 31st May 2021. However, as the number of COVID-19 cases in Malaysia showed no signs of reducing, the government has since then further extended the HOC program to 31st December 2021.
Which Properties Is the Home Ownership Campaign (HOC) Applicable To?
The first thing to note is that the HOC program is not applicable to subsale homes. The HOC campaign is only applicable to developer units that are registered under the program. This means that for buyers to enjoy HOC benefits, they will need to purchase developer units that have registered with the government to be under the Home Ownership Campaign.
When first introduced in 2019, the HOC program was designed to reduce the property overhang in the market. However, as it was reintroduced in 2020 under the PENJANA plan, the program is now applicable to many new and under construction developments in the market.
An example of this is all of Exsim’s upcoming developments at Damansara Perdana, as well as most of Mah Sing’s new and upcoming developments. All of these units have been registered under the HOC program, and all home buyers who opt to purchase these developments will enjoy the HOC benefits for as long as the HOC program runs.
What are the criteria for a property to qualify under the Home Ownership Campaign (HOC)?
There are several criteria for a property to qualify under the Home Ownership Campaign (HOC). First and foremost, as this campaign is designed to increase home ownership, it is only applicable to residential properties. This includes condominiums, serviced apartments, terrace houses – and yes, even SoHo units.
The second criteria is that the homes must be priced between RM300,001 to RM2.5 million before the 10% discount, which we will cover in the following section. Should the property be priced below RM300,001 or above RM2.5 million, they would automatically not be eligible for the HOC program.
The third criteria is that the property buyer must be a Malaysian citizen. This program is after all to boost the home ownership of Malaysians. So what happens if you are a long term resident in Malaysia but of a foreign status? Unfortunately, you will not be qualified to purchase a home under this campaign – unless you have a Malaysian spouse who can purchase the home under his/her name.
The fourth and final criteria is that the home you purchased must be within the Home Ownership Campaign period. In this case, it means that you would have had to purchase your home from 1st June 2020 to 31st December 2021 – unless the campaign is further extended.
What Benefits Do Buyers Get From the Home Ownership Campaign (HOC)?
This is where it gets fun! The Home Ownership Campaign offers many discounts to interested home buyers. The first major perk is the minimum 10% discount on the property. That’s right, all properties that are under the Home Ownership Campaign will get a minimum of 10% discount! This means that you could get an even bigger discount depending on the property you purchase!
The second major perk is an exemption of Stamp Duty charges for the first RM1 million. This means that should you decide to purchase any property that is below RM1 million, you do not need to pay for your Stamp Duty or Instrument of Transfer charges at all! However, should you opt to purchase a home above RM1 million, the Stamp Duty charges will only be 3% as compared to the previous 4%.
The third major perk you can get from the Home Ownership Campaign is an exemption of Instrument of Transfer charges. Unlike the Stamp Duty exemption for only the first RM1 million of the property price, all Instrument of Transfer charges get an exemption for properties that are priced up to RM2.5 million!
Now let’s take a look at a sample case. Should you decide to purchase a house priced at RM500,000, you will get a minimum 10% discount of RM50,000 on the selling price. This means that your house is now priced at only RM450,000. The Stamp Duty charges for a house priced at RM450,000 is RM8,000, and the Instrument of Transfer charges will total about RM2,025. But for a property that is priced below RM1,000,000, you are exempted from both charges!
So in short, should you purchase an RM500,000 residential property, you would enjoy a total savings of RM60,025! Now isn’t that an amazing deal or what? And if you didn’t already understand how the HOC program works, you will now get why everyone is rushing to purchase a home under the Home Ownership Campaign.
Is 2021 the Right Time To Buy A Property in Malaysia?
In short, if you have a stable job and you are looking for a first home or home upgrade, then yes! Now is the perfect time for you to buy a home in Malaysia, especially since the HOC program is now not only applicable to completed properties but also to brand new and upcoming developments.
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(Written by Isabelle, 10th June 2021)