HOC
what is hoc

What is HOC

What is the Home Ownership Campaign (HOC)

HOC presentation 2019

Have you heard the Home Ownership Campaign (HOC) before but failed to grasp its context? Or maybe you were interested in availing of this program, and yet you did not qualify? Either of these two, here’s a piece of good news for you!

 

The HOC was Malaysia’s brainchild to address the dwindling number of locals capable of purchasing their own homes. This program ran the whole of 2019 and managed to increase the sales for residential houses in the country to more than RM 14.65bil way beyond the government’s RM3bil target.

 

Data from the Real Estate & Housing Developers’ Association (REHDA) revealed that the majority of the sold properties in 2019 were residential houses in the Klang Valley, with a market value ranging from RM 500,000 to RM 750,000.

 

The salient features of the HOC during its pilot run in 2019 include the stamp duty exemptions for sales and purchase agreements and the obligatory 10% discount that property developers must provide to their clients.

 

The way the HOC increased the number of homeownership in Malaysia is remarkable. Real property experts all agree that HOC is a successful program.

 

The HOC was supposed to be implemented only in 2019, but due to the COVID-19 pandemic that’s causing worldwide havoc, the government of Malaysia opted to rerun this program from June 01, 2020- May 31, 2021.

 

Below is a detailed explanation as to why the Malaysian government decided to reintroduce the HOC starting in June 2020.

 

Why Malaysia Reintroduce HOC in 2020?

Malaysia reintroduced the HOC mainly to jumpstart the economy and to provide locals with the opportunity to acquire high-quality residential homes for a lower price.

 

As of the third week of June, Malaysia recorded around 8,500 people tested positive of the COVID-19 infection. This number remains conservative compared to the number of cases reported in the other countries in Southeast Asia. In fact, Malaysia was able to flatten the curve of the infection and managed to cut the number of people tested positive each day to two digits only.

With this development, the country’s movement control order (MCO) was recalibrated, and the more relaxed conditional MCO was implemented starting May 4- June 09, 2020.

 

Under the conditional MCO, identified business sectors are allowed to resume operations in the hope of reviving the crippled economy the soonest possible time.

 

The reintroduction of HOC was actually part of the government’s PENJANA (Pelan Jana Semula Ekonomi Negara) or the National Economic Recovery Plan. This recovery program revolves in three thrusts: Empower People, Propel Businesses and Stimulate the Economy. The PENJANA was also crafted using the government’s 6R key approaches, which stand for Resolve, Resilience, Restart, Recovery, Revitalize, and Reform.

 

For you to understand more what HOC can offer to Malaysians during this pandemic, find our detailed discussion below.

 

What’s new With the Reintroduced HOC?

Just like in its first outing in 2019, the HOC this year will provide significant subsidies and perks for home buyers. According Prime Minister Tan Sri Muhyiddin Yassin, so long as you’re a Malaysian citizen, you can enjoy the following premium benefits of HOC starting June 2020 until May 31, 2021.

 

  • Stamp Duty Exemptions. In every purchase of a property, you have to pay for the stamp duty. After you pay the stamp duty, a physical stamp will be attached to your documents, denoting that all of your papers are legal and binding. In Malaysia, there are certain tiers made to determine the amount of stamp duty tax that you have to pay. For those properties bought worth RM100,000, you need to pay for a 1% stamp duty tax. For those properties amounting to RM100,001 but not exceeding RM500,000, 2% is the stamp duty fee. All residential properties with a market value of more than RM500, 000, the stamp duty fee is 3%.

 

Amid the pandemic, all the stamp duty brackets are definitely not easy to bear. The fact that the economy is just restarting and people’s livelihoods are not yet rolling full-blown, you would instead save your money than to buy a home. But this is precisely what the second implementation of the HOC is all about. To help people recover and find affordable residential housing units in strategic places.

 

Under the reintroduced HOC, the government would waive the stamp duty tax as long as the value of the subject residential property will reach RM300, 000- RM2.5 million.

 

  • Waived Real Property Gains Tax (RGPT). You no longer need to shoulder the RGPT if you buy a residential property within June 01, 2020- May 31, 2021. This clause is enshrined in the latest reimplementation of HOC, as confirmed by PM Muhyiddin. RGPT is a kind of tax supposed to be levied from homeowners and business owners upon disposing of their properties within five years from the date of acquisition.

 

  • Lifting of the Financial Margin. Also included in the reintroduction of the HOC is the government’s mandate to remove the 70 percent financing margin for people who wish to avail of third housing loan onwards with RM600, 000 minimum market value.

 

  • 10% Discount. To further encourage the locals to purchase their own residential units, also part of the HOC is a mandate for the sellers or developers to provide a 10% discount to all the residential properties listed in June 01, 2020- May 31, 2021. For instance that you want to purchase a residential unit worth RM600, 000, you will be given a whopping discount of   RM60,000.

 

  • No Limit. The government will not hinder you from acquiring multiple residential properties as long as you are a Malaysian citizen, and your fund warrants.

 

Who can Qualify to the HOC 2020?

  • Citizens of Malaysia. The first and foremost requirement to qualify for the HOC is that you must be a Malaysian citizen and a permanent resident of the country. This limiting clause covers both the purchasers and co-purchasers of a particular residential property.

 

  • Allowed Properties. Only those properties listed within the period of the formal reimplementation of the HOC (June 01, 2020- May 31, 2021) will be included in this scheme.

 

  • Purchasers of Residential Properties. Since the HOC was mainly crafted to increase the homeownership among Malaysians, it was clearly stated in the HOC’s guidelines that only those who intend to acquire property solely for residential purposes could benefit from this program.

 

  • SPA Lookout. To qualify for the HOC, make sure that the Sales and Purchase Agreement (SPA) you’ll present was stamped anywhere between June 01, 2020- May 31, 2021.

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