Malaysia Property Progressive Payment Schedule

What is the progressive payment schedule for buying a new property under construction in Malaysia?

 

The Housing Development Act (HDA) 1966 was updated with Housing Development Amendment Act (HDAA) 2012 that came into effect on June 1, 2015.

 

Details of the breakdown for progressive payment for Schedule G & H are as below:-

Schedule G is for landed residential while Schedule H is for strata residential.

There is no schedule for commercial properties thus less protection for buyers.

 

SCHEDULE OF PAYMENT OF PURCHASE PRICE

Instalments Payable%Amount
1.Immediately upon the signing of this Agreement10RM
2.Within twenty one (21) working days after receipt by the Purchaser of the Vendor’s written notice of the completion of:-
(a) the work below ground level including piling and foundation of the said Building comprising the said Parcel10RM
(b) the reinforced concrete framework and floor slab of the said Parcel15RM
(c) the walls of the said Parcel with door and window frames placed in position10RM
(d) the roofing/ceiling,electrical wiring, plumbing (without fittings), gas piping (if any)and internal telephone trunking and cabling to the said Parcel10RM
(e) the internal and external plastering of the said Parcel10RM
(f) the sewerage works serving the said Building5RM
(g) the drains serving the said Building5RM
(h) the roads serving the said Building5RM
3.On the date the Purchaser takes possession of the said Parcel with water and electricity supply ready for connection to the said Parcel12.5RM
4.Within twenty-one (21)working days after receipt by the Purchaser of the written confirmation of the Vendor ‘s submission to and acceptance by the Appropriate Authority of the application for subdivision of the said Building2.5RM
5.On the date the Purchaser takes vacant possession of the said Parcel as in item 3 and to be held by the Vendor ‘s solicitor as stakeholder for payment to the Vendor as follows –5RM
(a) two point five per centum (2.5%)at the expiry of six (6)months after the date the Purchaser takes vacant possession of the said ParcelRM
(b) two point five per centum (2.5%)at the expiry of eighteen (18)months after the date the Purchaser takes vacant possession of the said ParcelRM
TOTAL100RM

 

Monthly Instalment Interest Calculation

RM400,000 at 90% loan rate at 4.40% for first 10% released in month with 30 days

400,000 x 10% x 4.40% x 30 / 365 = 144.65

Examples of Monthly Instalment

1m at 90% loan rate at 4.30%

 

600k at 90% loan rate at 4.35%

400k at 90% loan rate at 4.40%

 

LAD Late Delivery Payment to Housebuyers

Liquidated Ascertained Damages payable to housebuyers for lateness is delivering of vacant possession in 24 months (landed) or 36 months (strata) calculated 3 years from date in S&P.

LAD: 10% per annum on purchase price for period of delay

Notes:

  • Complaint must be submitted within 12 months from CCC
  • Developers for residential properties can apply to extend delivery by another 12 months.
  • Caution: Do NOT sign any documents that waive your rights to LAD which have been practiced by certain unscrupulous developers.

If you face difficulties getting your keys, contact the Housing Tribunal (TPPS)

 

What Developers are No Longer Allowed to Promise Housebuyers

  • Developer Interest Bearing Scheme (DIBS)
  • Free legal fees
  • Projected monetary returns/gains/rentals
  • Claim panoramic views
  • Travel time to nearby destinations
  • Other information developer cannot genuinely lay proper claim

 

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8 thoughts on “Malaysia Property Progressive Payment Schedule

  • August 14, 2017 at 1:02 pm
    Permalink

    Hi
    Just wanna ask..if there is a rebate 13% or 15% . Means 9% when SPA, 2% on stage 2A and 1% on VP. Does it means that i only have to fork out just 1% right?

    Hi Fizy, It depends on the seller for the rebate timing. But yes based on the rebate schedule you provided, it appears you only need to pay 1% (10%-1%) upfront. (Excluding legal/misc fees if applicable)

    Reply
  • December 26, 2017 at 7:53 pm
    Permalink

    Hi, referring to your given example eof monthly repayment for “400k at 90% loan rate at 4.3% interest”, can you explain how the “monthly installment amount” being calculated?? Let say during the “Pilling & Foundation” stage, buyer needs to start paying 4.3% interest of the 10% loan (or RM40,000), which should be RM172/month right? May I know the calculation method you use to get RM197?

    Hi BiliBala Seng, Thanks for the query. The previous illustration was a monthly installment for interest + capital payment. We have updated the illustrations to be clearer and more up-to-date, and a new section on monthly installment interest calculation.

    Reply
  • January 3, 2018 at 1:18 pm
    Permalink

    Hi,
    Will the interest paid during the constuction period be deducted from overall interest amount imposed during loan tenure?

    Hi Faiz, the interest paid will be on the amount of loan disbursed. In a sense, the interest you are paying is part of the overall interest amount due. However, it does not reduce the interest that you will need to pay for the entire property loan based on an amortization table.

    Reply
    • August 9, 2018 at 10:34 am
      Permalink

      Hi, can you elaborate more on the interest part?

      So assuming based on loan of RM1,000,000 , 30 years, interest rate 4.3%.

      Based on normal amortisation table, the total interest is RM 781,537.

      So because loan release based on percentage of completion, and therefore the interest charged during the early stage is lower, but how do the bank make up the remaining interest back to RM 781,537?

      Hi Liam, to clarify the interest paid during the construction phase is typically not shown for the interest payable for the 30 year loan shown in an amortisation table. So you will be paying the interest during construction + eg RM781k for the 30 year loan duration.

      Reply
  • January 10, 2018 at 9:36 am
    Permalink

    Hi,
    If the developer failed to deliver the unit on the stated period (36months), what should the buyer do?
    How is the 10% per annum on purchase price calculated, if let’s say the unit priced at 400k?
    And do the buyer still need to serve the interest? What about the monthly installment?

    Hi Natrah, Buyer should contact the developer for liquidated and ascertained damages (LAD) payment. 10% of 400k per annum would be 40k per year (pro-rated for period less than 1 year). The buyer will still need to pay interest and monthly installments as this would be the buyer’s obligation with the financier.

    Reply
  • February 28, 2018 at 12:03 pm
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    LAD Late Delivery Payment to Housebuyers
    Liquidated Ascertained Damages payable to housebuyers for lateness is delivering of vacant possession in 24 months (landed) or 36 months (strata) calculated 3 years from date in S&P.

    LAD: 10% per annum on purchase price for period of delay

    I plan to buy a small unit service apartment in Subang. The developer claims that government has extend VC to 48 months. Is this true? If this is false information, is it meaning the developer cheated on us? So we can proceed for LAD claim if they delay after 36months, right?

    Hi Penny, the High Court has in the past made a decision to set aside the order by the urban wellbeing, housing and local government minister to give a 12-month extension to a developer. You may want to seek legal remedy for the extension.

    http://www.freemalaysiatoday.com/category/nation/2017/02/28/delays-are-developerss-responsibility-says-rehda/

    Reply
  • July 24, 2018 at 10:48 pm
    Permalink

    hi,
    interested how do you calculate the capital. I am got figure out how do you calculate the interest only, but how do you calculate the capital amount. What is the formula?
    Thank you

    hi Khairis,
    The capital payment would be the assumption that you start paying for capital repayments on the property immediately (and not just the interest). Capital based on loan amount and completion stage %.

    Reply
  • July 28, 2018 at 10:29 am
    Permalink

    Hi,
    Please give me an explanation on the third schedule of payment of purchase price.What is actually foundation,structural framework,internal and external finishes.If I want to check on the above what should I be checking to make sure that they have finished the stages accordingly.

    Thank you.

    Hi Kalai,
    Foundation: development begins on piling and foundation work
    Structural Framework: development begins on concrete framework and floor slab
    Internal and External Finishes: development begins on plastering

    Developer would need to fulfill the requirements before bank releases payment. It is not a norm for personal checking on the property stages. You can try checking with the developer or bank.

    Reply

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