PETALING JAYA: The stamp duty exemption extension to first-time home buyers for the purchase of property below RM500,000 is set to spur affordable housing sales and homeownership among the low to middle-income groups.
The measure, announced under Budget 2026 last Friday, means full stamp duty exemption on transfer instruments and loan agreements for a further two years until Dec 31, 2027.
For first-time home buyers, the government proposes a full stamp duty exemption on transfer instruments and loan agreements for the purchase of a first home worth up to RM500,000, extended for two years, until Dec 31, 2027.
Zerin Properties chief executive officer Previn Singhe said this targeted policy effectively reduces the upfront financial barrier for genuine entrants, which should sustain healthy transaction momentum in the affordable housing segment without exerting broad upward pressure on prices.
“It also aligns well with the government’s broader ecosystem of affordability initiatives, including the expanded Housing Credit Guarantee Scheme or SJKP and rent-to-own pathways, creating a cohesive support structure for new buyers,” he told StarBiz.
For the exemption to deliver its maximum impact, Previn, however, said that a corresponding focus on supply is crucial.
“The policy’s success will be amplified by ensuring that well-located, affordable units matching first-time buyer preferences reach the market efficiently.
“This calls for fast-tracking development approvals for such projects, applying calibrated density for transit-oriented sites to improve viability, and creating clear pathways to absorb the existing pool of viable but unsold completed units.”
Previn said a coordinated approach between demand-side incentives and streamlined supply will be key to fully realising the benefits of this extension.
CBRE|WTW group managing director Tan Ka Leong believes that the extension of the stamp duty exemption will improve affordability for first-time buyers, youths, gig workers and the self-employed individuals.
“This is supported by the expanded SJKP guarantees that have increased to RM20bil and Bank Simpanan Nasional’s RM500mil housing fund, which helps these groups access financing.
“Additionally, the Youth Housing Financing Scheme is extended to 2026 to assist up to 48,000 young civil servants in buying homes.
“Together, these measures aim to boost demand and reduce the oversupply of affordable housing.”
Olive Tree Property Consultants founder and chief executive officer Samuel Tan said the stamp duty exemption extension makes the cost of purchasing affordable to first-time house buyers.
“It will also rejuvenate the property market which appears to be lagging in some states.” It is noteworthy that the need for affordable housing was identified as one of the initiatives under the recently announced 13th Malaysia Plan (13MP).
Under the 13MP, which was tabled in Parliament on July 31, the government announced plans to develop one million affordable housing units between 2026 and 2035.
According to the National Property Information Centre (Napic), Malaysia’s property transaction value fell 8.9% in the first quarter of 2025 to RM51.42bil, compared to RM56.47bil in the previous corresponding period.
Meanwhile, the transaction volume dropped by 6.2% year-on-year, with 97,772 transactions recorded in the first quarter of 2025 (1Q25), compared with 104,194 in 1Q24.
According to Napic, new residential launches more than doubled to 12,498 units in 1Q25 from 5,585 units a year earlier. However, sales performance remained modest at 10.8% (or 1,351 units).
Previn highlighted that most developers have been focusing on the mass market with their launches. He noted that a significant proportion of launches (72.8% in the landed segment and 42.8% priced between RM300,001 and RM500,000), indicated a more disciplined focus on segments with stable, owner-occupier demand, particularly among the M40 group.
Previn also pointed out that the Malaysian House Price Index recorded a 0.9% year-on-year increase in the first quarter of this year, indicating a stable pricing environment without overheating.
With average transaction prices in many urban areas remaining below the RM500,000 threshold, Previn said stability is crucial for sustaining buyer interest, especially in the mid-market segment where affordability remains a key consideration.
Savills Malaysia Sdn Bhd group managing director Datuk Paul Khong said the stamp duty exemption extension will have a positive impact on demand for homes up to RM500,000.
“The Napic numbers show the annual new house buyers in 2024 to be at about 200,000 transactions (77% of residential transactions), whilst the first six months of 2025 currently sits close at 93,000. Thus, we foresee that 2025 will have a similar outcome.
“We expect this figure to hover above the 200,000-mark for next year with some steady increases as this Budget continues to support these higher numbers financially. Therefore, we hope to see stronger demand in these statistics for 2026.”
Khong noted that this exemption started in 2019 for properties capped at RM300,000.
“This improved in 2021 to RM500,000 and by 2027, it will be its ninth year running.”
Previn also believes that the stamp duty exemption extension will spur sales for homes below RM500,000.
“National data for the first half of 2025 shows this band is already the heart of the market. Roughly 77% of residential transactions were below RM500,000, with 53.1% under RM300,000 and a further 24.3% between RM300,001 and RM500,000.
“In short, about three quarters of all deals fall within the policy’s target range.”
Previn said a full stamp duty exemption meaningfully reduces cash at entry and should pull fence sitters into the market, especially in secondary markets and established suburbs, where supply is available.
“We also expect a modest uplift in primary market bookings as buyers bring forward decisions to lock in the exemption before Dec 31, 2027.
“Developers are likely to calibrate unit mixes and sizing to keep entry prices within RM300,000 to RM500,000, particularly in transit served corridors and established suburbs.”
Meanwhile, Lagenda Properties Bhd
group managing director Datuk Jimmy Doh said the stamp duty exemption extension up to 2027 was “a win for affordable housing.”
“The continuation of full stamp duty exemption for first-home purchases valued up to RM500,000 will greatly ease the financial burden for aspiring homeowners,” he said in a statement.
Similarly, Mah Sing Group Bhd founder and group managing director Tan Sri Leong Hoy Kum also said the extension of the stamp duty exemption will further encourage homeownership among the low-to middle-income groups.
“The government’s proposal to extend the full stamp duty exemption on the instrument of transfer and loan agreement for first homes priced up to RM500,000 until Dec 31, 2027 will continue to ease the financial burden for first-time homebuyers.
“This measure directly aligns with Mah Sing’s commitment to making quality homes more accessible, as almost 50% of the group’s residential projects are priced within the affordable range below RM500,000 and cater primarily to first-time homebuyers.”
Leong said Mah Sing is well-positioned to benefit from this initiative, which is expected to stimulate stronger demand for affordably priced homes.
Moreover, Leong also urged the government to reintroduce the Home Ownership Campaign (HOC).
“Recognising that housing remains a key pillar of social and economic stability, Mah Sing hopes the government will consider reintroducing the HOC as part of ongoing measures to make property ownership more attainable for Malaysians.”
He noted that the previous HOC (which was introduced during the pandemic) proved highly effective in easing the financial burden of homebuyers through stamp duty exemptions and other incentives, while stimulating the property market and related industries.
“A renewed HOC would not only encourage genuine homeownership, especially among first-time buyers, but also help sustain market momentum in 2026.”
