KUALA LUMPUR, Oct 11 — The government will collaborate with financial institutions in introducing a Rent-To-Own (RTO) financing scheme, Finance Minister Lim Guan Eng said today during the Budget 2020 announcement.

This will address those who are unable to afford the initial 10 per cent deposit and access to financing in purchasing their homes.

“Through this scheme, financing of up to RM10 billion will be provided by the financial institutions with support from the government via a 30 per cent or RM3 billion guarantee,” said Lim.

This RTO scheme is for a first home purchase for up to RM500,000 property price.


“Under this scheme, the applicant will rent the property for up to five years and after the first year, the tenant will have the option to purchase the house based on the price fixed at the time the tenancy agreement is signed.

“The government will provide stamp duty exemptions on the instruments of transfer between the developer and financial institution, and between financial institutions and the buyer in this scheme,” he said.

To reduce supply overhang of condominiums and apartments amounting to RM8.3 billion in the second quarter of 2019, Lim said, the government will lower the threshold on high-rise property prices in urban areas for foreign ownership from RM1 million to RM600,000 in 2020.


As for youths purchasing their first home, he said the government will extend the Youth Housing Scheme administered by Bank Simpanan Nasional (BSN) from January 1 next year to December 31, 2021.

“The scheme also offers a 10 per cent loan guarantee through Cagamas Berhad (National Mortgage Corporation) to enable borrowers of full financing and RM200 monthly instalment assistance for the first two years limited to 10,000 home units,” he said.

In response to the public view on the Real Property Gain Tax (RPGT) imposed on the disposal of properties after five years, Lim said the government will enhance the RPGT treatment by revising the base year for asset acquisition at January 1, 2013 for assets acquired before 1 January 2013 as compared to the previous base year of January 1, 2000.