Malaysia Budget 2025: Key Highlights on Housing, Infrastructure, and Green Initiatives

Malaysia’s Budget 2025, themed MADANI Economy: Prosperous Nation, Well-being of the People, was presented by Prime Minister Anwar Ibrahim with a record allocation of RM421 billion. The budget focuses on revitalizing the economy, implementing reforms, and improving quality of life for Malaysians. Here’s a comprehensive breakdown of the key announcements:

Affordable Housing and First-Time Homebuyer Incentives

People’s Residence Programme (PRR) and Rumah Mesra Rakyat (RMR)

1. RM900 million allocated for 48 PRR and 14 Rumah Mesra Rakyat (RMR) projects, including two new developments in Port Dickson and Seberang Perai Tengah, Penang.
2. 30 PRR projects will be completed by the end of 2025, benefiting 17,500 new residents.
3. A ceiling of RM90,000 will be set for the construction of each home under the PPRS (Program Perumahan Rakyat Sejahtera).
4. House repair assistance under PPRS will be increased to RM20,000 per home.

Housing Credit Guarantee Scheme (SJKP)

1. The allocation for SJKP is increased to RM12.8 billion for 57,000 first-time homebuyers.
2. The scheme will now cover homes built on wakaf land, with guarantees of up to RM500,000 for first-time buyers.
3. A new Step Up Financing Scheme will be introduced under SJKP, providing government guarantees up to RM5 billion. The scheme allows for lower repayments for the first five years, specifically helping young individuals purchasing their first home.

Tax Relief for First-Time Homebuyers

1. Individual income tax relief for home loan interest payments up to RM7,000 for homes priced up to RM500,000, and RM5,000 for homes priced between RM500,000 to RM750,000.
2. The relief applies for three consecutive years, starting from the first year of interest payment.

Infrastructure and Public-Private Partnerships (PFI)

Major Investments and Regional Development Projects

1. RM120 billion allocated for public investment projects, with RM9 billion through public-private partnerships (PFI).
2. Infrastructure projects by region include:
   • Penang: The Penang LRT project, Penang International Airport expansion, and Batu Kawan Industrial Park 3.
   • Johor: Expansion of the North-South Expressway (from Simpang Renggam to Machap) and the Johor Bahru-Singapore RTS.
   • Kelantan: Machang Water Treatment Plant and runway expansion at Sultan Ismail Petra Airport.
   • Kedah: Expansion of the Kulim Hi-Tech Park and construction at Kulim Hospital.
   • Sabah & Sarawak: RM6.7 billion for Sabah and RM5.9 billion for Sarawak for infrastructure development, including Tawau and Miri airports and cancer center in Sarawak.

Flood Mitigation and Disaster Management

1. RM600 million allocated for NADMA to prepare for floods, including RM300 million set aside for immediate disaster responses.
2. RM50 million allocated for upgrading drainage systems nationwide.
3. RM10 million for a Geotechnical Study on soil layers along major roads in Kuala Lumpur.

Green and Sustainable Initiatives

1. Solar panel installations on nearly 5km of rooftops, walkways, and parking areas in Putrajaya.
2. The Net Energy Metering (NEM) program for solar PV systems is extended until June 2025.
3. Green Technology Financing Scheme (GTFS) with a RM1 billion allocation until 2026.
4. UEM Lestra and TNB to invest RM16 billion in decarbonizing industrial areas and upgrading transmission and distribution networks.

Regional and Economic Development Projects

New Initiatives and High-Value Investments

1. Special tax incentives for export expansion and integrated circuit (IC) design activities.
2. Tax deductions for private universities offering courses in AI, robotics, data science, and other high-tech sectors.
3. Income tax exemptions for carbon capture, utilisation, and storage (CCUS) projects, fostering environmental sustainability.
4. The Penang LRT and expansion of Penang International Airport aim to boost tourism and business in the northern region.

Public-Private Partnership Projects (PPP)

Key projects using the PPP model include:

1. Sultanah Aminah 2 Hospital in Johor.
2. Elevated highway from Juru to Sungai Dua, Penang.
3. West Coast Expressway (WCE) priority sections between Banting, Selangor and Gelang Patah, Johor.

Inclusivity and Rural Development

The Sejati MADANI initiative, with a total allocation of RM1 billion, will focus on:

1. RM600 million to boost rural economies.
2. RM200 million to expand the Kampung Angkat MADANI program to 200 villages.
3. RM100 million for public universities to assist with services in rural areas, such as house repairs.

Other Key Announcements

1. 50 acres of Bandar Malaysia will be reserved for Malay reserve land for affordable housing and commercial projects.
2. RM10 billion for SJKP to assist 40,000 borrowers, with an additional RM2.8 billion to benefit 57,000 first-time homebuyers.
3. Flood relief efforts backed by RM20 million in matching grants for GLIC foundations.

Conclusion

Malaysia’s Budget 2025 represents a forward-looking strategy to stimulate the economy, expand infrastructure, and promote sustainable development. By prioritising affordable housing, regional development, and green technology, the government aims to foster a more prosperous and equitable future.