Budget 2025 Offers Tax Relief for First-Time Homebuyers
While Budget 2025 may not be seen as a property-focused budget, property experts have praised the introduction of tax relief for housing loan interest payments, a move expected to incentivize first-time homeownership.
Key Housing Tax Relief Measures:
- RM7,000 tax relief for housing loan interest payments on homes priced up to RM500,000.
- RM5,000 tax relief for homes priced between RM500,000 and RM750,000.
This policy aims to alleviate the financial burden of first-time homebuyers and foster greater homeownership across Malaysia.
Property Consultants Applaud New Measures
Despite the absence of significant property sector incentives, the introduction of tax relief for first-time homebuyers was welcomed by industry players.
Olive Tree Property Consultants CEO Samuel Tan expressed optimism, noting, “The tax exemption for the interest paid on housing loans is a proactive measure to encourage homeownership.”
Similarly, Savills Malaysia Group Managing Director Datuk Paul Khong stated that while Budget 2025 was not particularly property-focused, the tax relief initiative was a step in the right direction for first-time buyers.
Limited Property Sector Incentives in Budget 2025
Khong acknowledged that the property sector continues to be on the “back burner” with no substantial goodies for developers or investors. However, the Johor-Singapore Special Economic Zone and the redesignation of Forest City as a free trade zone are expected to spur local economic growth and boost tourism, indirectly benefiting the property market.
Sulaiman Akhmady Mohd Saheh, Director of Research at Rahim & Co International Sdn Bhd, noted that the budget’s focus on strengthening the economy and supporting first-time homebuyers through tax relief reflects the government’s efforts to improve the overall quality of life for the people.
A Balanced Approach for Housing and Sustainability
Zerin Properties CEO Previndran Singhe emphasized that Budget 2025 takes a balanced approach by addressing both housing affordability and sustainability goals. The tax relief for home loans will stimulate demand for homes, while the introduction of the carbon tax and green incentives signals the government’s push for more sustainable property development in Malaysia.
Encouraging a Sustainable Property Landscape
Although CBRE | WTW Group Managing Director Tan Ka Leong acknowledged the lack of “game-changing” mega projects, he commended the government’s efforts to invest in sustainable technologies. The Step-Up Financing Scheme under SJKP and the introduction of the carbon tax are seen as positive steps for both homeowners and industrial players.
Tan highlighted the incentives for ESG investments and tax exemptions related to carbon capture, utilisation, and storage (CCUS), which aim to reduce the financial impact on industries while encouraging more sustainable energy consumption.
Other Noteworthy Property-Related Announcements in Budget 2025
The government also allocated 50 acres of the Bandar Malaysia development as Malay reserve land, marking a first in Malaysia’s history. Additionally, 8,800 acres of abandoned land will be utilised for farming activities, such as poultry farming and community farming, which is expected to bolster the nation’s agricultural sector.
Conclusion: While Budget 2025 did not offer extensive benefits for the property sector, the tax relief for housing loans and the government’s focus on sustainability signal a progressive shift. The property sector will likely see positive impacts, especially for first-time homebuyers, and long-term developments towards green building practices in Malaysia.
