By Miichael Yeoh | October 11, 2025

The Malaysian Budget 2026 was tabled yesterday by Prime Minister and Finance Minister Dato’ Seri Anwar Ibrahim, themed “Memacu Ekonomi MADANI: Memperkasa Rakyat.”

With a total allocation of RM470 billion, this budget continues the government’s commitment to building a fair and inclusive economy — with property and housing once again taking center stage.

Here’s my summary and insight on what Budget 2026 means for property buyers, developers, and investors.

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🏡 1. Stamp Duty Exemption Extended for First-Time Buyers

Good news — the full stamp duty exemption on both the instrument of transfer and loan agreement for first-time buyers remains in place until 31 December 2027.

This applies to residential properties priced up to RM 500,000.

👉 What this means:
If you’re planning to buy your first home, your upfront costs remain much lower. For many young Malaysians, this can be the difference between “maybe later” and “buy now.”

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💰 2. Bigger Housing Loan Guarantee (SJKP Doubled to RM 20 Billion)

The Housing Credit Guarantee Scheme (SJKP) is being expanded from RM 10 billion to RM 20 billion, expected to help over 80,000 first-time buyers — including self-employed, gig workers, and informal earners.

👉 What this means:
Loan approvals should become easier. This is crucial for those who may not have formal payslips but have consistent income — a growing segment of today’s workforce.

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🌍 3. Higher Stamp Duty for Foreign Buyers

To cool speculative buying, stamp duty for non-citizens and foreign companies buying residential properties will rise from 4% to 8%.

Permanent residents (PRs) are not affected.

👉 What this means:
Foreign investors will likely focus only on premium areas like KLCC, Mont Kiara, and Penang island. For locals, this could mean less competition — and potentially better entry prices.

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🏢 4. Tax Deduction for Converting Commercial Buildings into Homes

A forward-thinking move — developers who convert old commercial buildings into residential use can now claim a 10% tax deduction (up to RM 10 million) on eligible renovation costs.

👉 What this means:
Expect more adaptive reuse projects — turning old offices or malls into apartments or co-living units. This could help rejuvenate urban centers while reducing idle property stock.

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🏠 5. Support for Rent-to-Own (RTO) and Build-Then-Sell (BTS) Schemes

Banks are encouraged to support RTO and BTS housing models to make ownership easier and reduce project abandonment.

👉 What this means:
More flexibility for buyers who can’t yet afford a traditional down payment, and stronger assurance that projects are completed before full payment.

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👨‍💼 6. Higher LPPSA Loan Limit for Civil Servants

The Public Sector Home Financing Board (LPPSA) limit will increase to RM 1 million in 2026.

👉 What this means:
Civil servants can now afford better homes in urban areas without needing multiple loans.

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🧱 7. RM 672 Million for Affordable Housing and Repairs

The government is allocating RM 672 million for:

• Affordable homes (Residensi Rakyat, Rumah Mesra Rakyat)
• Refurbishing old or dilapidated houses
• Maintenance for low- and medium-cost flats (e.g. lift replacements)

👉 What this means:
Positive for social stability and overall living quality. Also good news for contractors and local developers involved in affordable housing.

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⚙️ 8. Construction and Tax Updates

• SST on construction services will apply for new contracts from 1 Jan 2026.
• Carbon tax will begin in stages, affecting material costs (cement, steel).
• These may slightly raise overall building costs — developers should factor this into pricing.

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🔎 My Insights: What to Watch in 2026

1. Affordable and Mid-Range Housing
   Remains the government’s priority. Buyers in this segment have strong support — expect steady demand.
2. Conversion Projects = Hidden Opportunity
   Old commercial spaces could become the next hot residential spots. Developers who act early may gain an edge.
3. Foreign Demand Softens, Local Focus Strengthens
   With higher duties, foreign demand may dip — but this creates more room for local owner-occupiers and long-term investors.
4. Construction Cost Pressure
   SST and carbon-related costs might raise project expenses by 3–5%. Efficient developers with strong cash flow will manage better.
5. Financing Still Key
   Even with incentives, loan approval remains the biggest hurdle. Buyers should prepare documentation properly (income proof, CCRIS record, existing commitments).

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📈 Final Thoughts

Budget 2026 shows that Malaysia is moving toward a more sustainable and inclusive housing market — one that balances affordability with innovation.

For homebuyers, it’s a window of opportunity to act while incentives are strong.
For investors, it’s time to look beyond traditional launches and explore conversion, rental, and co-living strategies.
And for developers, the message is clear — adapt fast, innovate smart.

The property market in 2026 will favor those who understand trends early and act strategically.