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Did you know: Malaysians living in fast-paced cities like Klang Valley tend to move homes every 5 to 7 years?  This trend is driven by the rising cost of living, frequent job relocations, and the constant challenge of finding affordable yet quality housing that fits modern lifestyles. It’s one of the key reasons why many are rethinking the age-old debate: "Is it smarter to rent for flexibility or buy to invest in the long run?" But... what if you could actually do both? In this guide, we’ll break down the real costs, pros and cons, and hidden truths behind both renting or buying, so you can make a confident and informed decision in 2025. Rent or Buy?:Financial Breakdown: Investing vs Spending  Stability vs Flexibility: Which Lifestyle Suits You?  The Hidden Costs You Shouldn’t Ignore  Why Not Both? (How Can You Rent & Buy at The Same Time)Property as an Investment: Is It Still Worth It?  Final Thoughts: Make the Choice That Fits You  Financial Breakdown: Investing vs Spending Buying Buying a home means you're not just paying for shelter; you're investing in an asset that could grow in value over time.  With every mortgage payment, you're building equity essentially increasing your ownership stake in the property. And if property prices rise? That’s a win for your net worth. Renting Renting on the other hand, gives you freedom from long-term financial commitments.  You pay a fixed amount each month, typically with no surprise costs for maintenance or repairs. But, unlike buying, that money doesn’t build anything for your future. Once it’s paid, it’s gone. But if you’re someone still saving up for a down payment or planning to stay in a location short-term, renting can make more financial sense.  Stability vs Flexibility: Which Lifestyle Suits You? Buying When you own a home, you can renovate your kitchen, paint the walls any colour, and turn that spare room into your dream office.  Homeownership gives you a sense of permanence, stability, and full control over your space. But with that stability comes responsibility. You're in charge of repairs, upkeep, and property taxes. Plus, selling a home and moving isn’t something you can do overnight. Renting  Renting offers unmatched flexibility. Want to move cities for a new job? Upgrade or downsize easily?  Renting gives you that freedom. Perfect for people in transition, digital nomads, or those still figuring things out. Ultimately, it depends on your current stage of life and priorities. Are you nesting or exploring? The Hidden Costs You Shouldn’t Ignore BuyingBuying a home doesn’t just involve the sticker price. There are other costs to consider: Down payment (typically 10% of property price in Malaysia) Legal fees and stamp duty Valuation and loan agreement charges Maintenance, renovations, and sinking fund (for strata properties) RentingRenting on the other hand, usually requires: One to two months' deposit Advance rental Minimal maintenance responsibilities (landlord covers most costs) Don’t forget to factor these in when calculating your monthly housing budget. Often, first-time buyers underestimate the hidden costs and end up financially stretched. FactorBuyingRentingEquityBuilds over timeNo equity builtFlexibilityLow (tying down)High (easy relocation)CostsUpfront + maintenanceUsually fixed monthly expenseLifestyleHome personalization possibleLess responsibilityLegal/TaxMortgage, taxes, potential benefitsFewer entanglementsLong-Term ValuePotential appreciationNo asset appreciationWhy Not Both? (How Can You Rent & Buy at The Same Time)Still unsure which option makes more sense for your future? What if we told you: you can do both? In fact, many savvy Malaysians are choosing to do both rent where they want to live, and buy where it makes financial sense. Here’s how: Buy a property in a high-yield or affordable rental area, such as a subsale unit in a developing location. Continue renting your own place in a more convenient or lifestyle-friendly neighbourhood. Rent out the unit you purchased to generate income. Use that rental income to grow your savings or even pay off the loan. Over time, as the property appreciates or the rental income grows, you’ll have the option to upgrade and purchase a better home for yourself later on. This hybrid approach gives you the best of both worlds: the flexibility of renting and the long-term financial benefit of owning an appreciating asset. Property as an Investment: Is It Still Worth It? In Malaysia, property has long been seen as a solid, low-risk investment.  Despite market fluctuations, real estate tends to appreciate over time especially in prime areas like Klang Valley, Johor, and Penang. Plus, with the rise of Airbnb and rental income opportunities, many homeowners are turning their properties into income-generating assets.  If you're buying with an investor mindset, renting it out could help cover your mortgage and even provide passive income. However, like any investment, property comes with risks. Oversupply, market downturns, or unexpected repairs can eat into your returns.  Always do your research, calculate rental yield, and have an emergency fund in place. Final Thoughts: Make the Choice That Fits You  There’s no one-size-fits-all answer. What matters most is making a choice that aligns with your lifestyle, finances, and future goals. Whether you're buying your first home or looking for a flexible rental, being informed is the smartest thing you can do.  Malaysia’s property market offers opportunities for both renters and buyers, and with the right strategy, either choice can lead to a secure and comfortable future. Need expert advice or want to explore your options? Reach out to our team of property professionals. We’re here to help you make the right move. [custom_blog_form]Continue Reading: Rent vs Buy in Malaysia: Which Makes Sense with Your Current Salary?Klang Valley Property Market Insight: Opportunities and Challenges8 Important Tips for a Hassle-Free Home Buying Process

Hey there! Feeling like taxes are a maze you just can't figure out? Does all the news about Malaysia's changing Sales and Service Tax (SST) sound like financial jargon that might hit your wallet, especially when it comes to finding or keeping a roof over your head or a place for your business?Trust us, the new rules kicking in soon have many people scratching their heads, wondering how they will affect property prices and rents.But don't sweat it! We're here to explain it in simple terms so you know exactly what's happening and how it might impact you and your real estate plans in Malaysia.Here are the key takeaways about how Malaysia's expanded SST could impact real estate:Key Takeaways:Starting July 1, 2025, service tax will apply to several new areas, including construction services and commercial rental and leasing services.Residential properties and building work directly related to purely residential housing projects remain exempt from service tax.Construction services for non-residential and mixed-use buildings (such as offices, shops, and homes within a mixed-use project, provided the project is approved accordingly) are now subject to a 6% service tax if the service provider exceeds a certain threshold.Commercial property rental and leasing services are now subject to an 8% service tax if the service provider exceeds a certain income threshold. However, there are exemptions for residential rentals, very small businesses, and certain business-to-business (B2B) situations.What do You Know About the SST Expanded Version?1. What Exactly is This Expanded SST Hitting Malaysia's Real Estate?2. Will Buying a New House in Malaysia Get More Expensive After July 1, 2025?3. Will Renting an Office or Shop Space Be More Expensive?4. What About Serviced Apartments and Homes in "Mixed Developments"? Are They Taxed?5. How Does This New Tax Change Impact Property Developers and Builders?6. I'm Buying / Renting / Investing. What Should I Do Right Now?7. Getting Ready: Understanding Timelines and Finding Help8. Frequently Asked Questions (FAQs)1. What Exactly is This Expanded SST Hitting Malaysia's Real Estate?Okay, let's cut through the tax talk. Malaysia already has a Sales and Service Tax (SST). Think of it like a tax added onto certain goods when they're sold or specific services when they're provided. It has been around, but according to the Ministry of Finance1, the government is making some updates starting July 1, 2025.The government states that its primary objective is to expand the tax base slightly to support public services, but in a manner that's "targeted" so as not to disproportionately burden individuals, particularly when it comes to daily essentials. The big news is that service tax is now being applied to certain services that were previously exempt from taxation2.These include services such as construction and renting out commercial properties. Since real estate development and rental involve, well, construction and renting, people are discussing how these changes could shake up the property world.2. Will Buying a New House in Malaysia Get More Expensive After July 1, 2025?Many potential homebuyers will probably ask this question. The new rules introduce a 6% service tax on construction services. This applies if the taxable service value of the construction service provider exceeds RM1.5 million annually. The RM1.5 million threshold means that smaller contractors undertaking minor jobs might not reach this threshold, but most developers working on larger projects will.Image Source: FMTNow, here's a critical point, and some good news: Construction work specifically for residential buildings and public facilities directly related to these residential buildings is exempt from service tax. This was clearly stated by the Housing and Local Government Minister, Nga Kor Ming, after discussions with the Finance Minister II, Datuk Seri Amir Hamzah Azizan.3The government has also maintained a 0% sales tax on basic construction materials, such as cement, sand, and aggregates, which helps keep essential supplies affordable.4 Therefore, if someone is building a standalone house on land approved solely for residential use, the construction service for that house and the basic related amenities within that residential area shouldn't have the 6% SST added to them.Think of it like building your dream home from the ground up on a plot designated just for houses; the main building job here generally remains tax-exempt for service tax.However, and this is where things become a bit murky and worry some individuals, especially industry players like the Real Estate and Housing Developers' Association (REHDA)5.They argue that even with residential exemptions, increased costs from taxes on other parts of their business or other types of construction (like commercial or mixed-use) could indirectly lead to higher property prices overall.For example, if a developer builds commercial properties and residential properties, some increased costs from the commercial side could be factored into the business's overall pricing strategy. REHDA president Datuk Ir Ho Hon Sang highlighted that the industry already pays indirect taxes on materials and labour, and the SST adds to this burden.6Image Source: Malay MailWorks Minister Datuk Seri Alexander Nanta Linggi expressed that, despite these concerns, the government expects the SST expansion to have a limited impact on house prices, partly due to the residential exemption and transitional measures, such as a 12-month exemption for certain existing non-reviewable contracts.73. Will Renting an Office or Shop Space Be More Expensive?Okay, switching gears to rentals. If you rent a space for your business, such as an office or a shop, this area is changing. Rental or leasing services are now subject to an 8% service tax.8 This applies if the person or company providing the rental service (the landlord) has a total leasing or rental income exceeding RM500,000 within 12 months.9This threshold means that very small landlords might not be affected, but larger property owners and management companies will likely be.What counts as commercial rental? It covers activities such as leasing office buildings, shopping centres, warehouses, and renting out machinery, vehicles, or other tangible assets used for business purposes. For example, you are renting a printing machine for your business. If the rental company is large enough, you could now incur 8% SST.But wait, there are key exemptions here too!Residential property rentals are exempt from this tax. So, renting a house, apartment, or even residential units like SOHOs (Small Office Home Offices) is off the hook. Imagine renting a condo to live in that won't suddenly have 8% SST added.10If your business is classified as a micro, small, or medium enterprise (MSME) and has annual sales under RM500,000, you, as the lessee, might be exempt from paying the service tax on your commercial rent.There are also Business-to-Business (B2B) exemptions for rental and leasing services to avoid something called "cascading tax" (where tax is added multiple times in a supply chain). In simple terms, if a registered business rents to another registered business, which then rents it out again, the intermediate step may be exempt; however, the final rent paid by the end-user business remains subject to tax if the thresholds are met.Existing contracts that cannot be reviewed or renegotiated ("non-reviewable") get a 12-month exemption from the effective date.The Malaysia Retailers Association highlighted that rent is a significant fixed cost for businesses, and passing this tax to tenants could strain retail companies and consumers. CIMB Securities noted that this tax pressure on tenants could limit REITs' ability to increase rents for existing tenants.114. What About Serviced Apartments and Homes in "Mixed Developments"? Are They Taxed?Okay, this is where it can get a little confusing, and it's a big point of concern for developers like REHDA. A serviced apartment, even if people live in it, is often built on land zoned for commercial use or as part of a project that includes shops, offices, or hotels alongside residential units. These are called mixed developments.According to the official Guide on Construction Work Services from the Royal Malaysian Customs Department, construction services for mixed-use buildings are subject to service tax, and this applies to the total contract value for the entire building, including the residential and public utility areas within it, if approved by the local authorities for mixed development.Therefore, if you're building a tower with retail on the bottom floors and serviced apartments above, the construction service for the entire tower could be taxed at a rate of 6%.Think of building a tower block that's going to have shops, a gym (maybe considered a public facility), and serviced residences all rolled into one.The official guidance states that the construction of the entire building is subject to a 6% service tax if the contractor's annual services exceed the threshold.Image Source: BH OnlineREHDA president Datuk Ir Ho Hon Sang voiced strong concern that in city centres where land is scarce, residential units (like serviced apartments) are often built within these mixed developments. Subjecting the construction services for these buildings to SST, he believes, will inevitably lead to increased housing prices for the final buyers.He noted that even affordable housing under government schemes could be affected if it is located on commercial land as part of a mixed-use project.This contrasts with building services for a standalone apartment building or a housing estate on land zoned only for residential purposes, which remains exempt from the service tax. It's a distinction based on the type of development approval, not just whether people live there.5. How Does This New Tax Change Impact Property Developers and Builders?It's not just about potential price hikes for buyers or rent for tenants; this expansion significantly affects the businesses that build and rent these properties. For property developers and construction companies, the new service tax on construction (6%) and commercial rental (8%) can add to their operating costs.Image Source: The Edge MalaysiaIndustry associations, such as the Master Builders Association Malaysia (MBAM) and REHDA, have appealed to the government, warning that adding a 6% service tax to construction services will strain cash flows, disrupt existing contracts, and potentially lead to project delays or cost overruns.12 MBAM president Oliver Wee noted the industry already faces multiple layers of taxes.Image Source: MaybankMaybank Investment Bank (Maybank IB) indicated that for ongoing projects that have already been sold, developers may need to absorb the additional 6% construction cost, which could squeeze their profit margins, particularly for commercial and industrial builds. Maybank IB also highlighted concerns that developers involved in data centre construction may face increased costs and potentially reduced internal rate of return.13For rental income (from commercial properties such as malls or offices), while the 8% SST is typically borne by tenants, developers who own these properties worry that this might make it harder to negotiate rental increases, especially if the economy is slow.14 Maybank IB noted this could 'restrain developers’ leverage for rental increment negotiations'.So, while there's relief that pure residential construction is exempt, the tax on commercial and mixed-use construction, as well as commercial rental, adds new cost lines for developers and builders. They're hoping for more straightforward guidelines on how existing contracts are treated and adequate time to adapt business models and pricing strategies.15The Federation of Malaysian Manufacturing (FMM) noted they weren't consulted on the service tax expansion and are pushing for more straightforward transitional guidelines.6. I'm Buying / Renting / Investing. What Should I Do Right Now?Okay, so with all this swirling around, what's a person like you to do if you're thinking about property in Malaysia?a. HomebuyerUnderstand that while the construction of purely residential buildings is exempt, indirect costs or taxes on elements of mixed developments could still potentially influence prices. If you're looking at a serviced apartment or a unit in a building with shops or offices, ask the developer specifically about the project's classification and whether the construction tax has been factored into the price.While official sources indicate that construction is taxable for mixed development, how it affects the final sale price to you is something to clarify directly with the developer. Remember that even if construction costs go up, final pricing is always subject to market demand.16b. Home RenterGood news! Residential rentals are explicitly exempt from the new 8% SST. So, this tax change shouldn't affect your house or apartment rent.c. Business OwnerThis is where you need to pay attention. If your landlord is a business that exceeds the annual rental income threshold of over RM500,000, your rental service is likely subject to 8% SST starting July 1, 2025. Check if your business qualifies as an MSME with annual sales under RM500,000, as you might be exempt.Review your lease agreement and discuss it with your landlord to determine if and when this tax will be applied to your rental payments.d. InvestorIf you're buying a residential property to rent out as a home, that rental income isn't subject to the new tax. If you're investing in commercial property or units in mixed developments, be aware of the potential for higher construction/acquisition costs due to the 6% tax on construction services for such projects, and the 8% tax that will apply when you rent out that commercial space (if your rental income hits the RM500k threshold).In any situation, understanding your specific circumstances and potentially getting advice tailored to you is key.7. Getting Ready: Understanding Timelines and Finding HelpThe big date everyone's been talking about is July 1, 2025. That's when the expanded SST framework officially comes into effect for these new services, including construction and commercial rentals.Recognizing that this is a significant change, the government has announced a grace period until December 31, 2025, for businesses to comply with SST registration and reporting requirements.The Federation of Malaysian Manufacturing highlighted that no prosecution or penalties will be imposed for late registration, delayed filing, or errors if businesses show they are taking reasonable steps to comply by this date.This grace period helps businesses get their affairs in order, but it doesn't mean the tax isn't effective from July 1st or that it doesn't apply to taxable services from that date.There's also a mention of a 12-month exemption for existing non-reviewable contracts.This means that if a business signed a contract before July 1, 2025, which locked in pricing and terms without the possibility of review (hence, 'non-reviewable'), it may be exempt from applying SST on that contract for one year. This primarily affects businesses with those specific types of pre-existing agreements, allowing them a transition period.Change can feel like trying to hit a moving target, but getting informed is the first step! For the most accurate and official guidance, the Royal Malaysian Customs Department (JKDM) website (https://mysst.customs.gov.my/) and its publications, such as the "Guide on Construction Work Services17" and "Guide on Rental or Leasing Services18," are the primary sources.They even provide contact numbers for inquiries. Consulting with a tax professional or legal advisor can also help you navigate how these specific rules apply to your unique property or business situation.Embrace the change, get informed, and don't hesitate to ask the right questions. It's all about making wise decisions in the evolving landscape of real estate in Malaysia.So, while residential homes themselves remain shielded from direct SST on construction and rental, the expanded tax does add complexity, especially for mixed developments and commercial rentals.Industry players face new costs and adjustments, which could subtly ripple through the broader market. Understanding these nuances and staying informed is the best way to navigate Malaysia's property landscape confidently.8. Frequently Asked Questions (FAQs)What is the new SST expansion effective from July 1, 2025? The Malaysian government is expanding the scope of its Service Tax (SST) from July 1, 2025, to include several new categories of services, such as construction, rental or leasing (specifically commercial), financial, private healthcare, education, and beauty services, aiming to broaden the tax base.Is service tax charged when building my own residential house? No, construction work services specifically for residential buildings and related public facilities (like roads and playgrounds within a residential area) that are approved solely as residential developments are exempt from service tax.Does the new 6% SST apply to all construction work in Malaysia? No, the 6% SST applies only to construction services for infrastructure, commercial, and industrial buildings where the service provider's annual taxable service value exceeds RM1.5 million. Construction of residential buildings on land approved solely for residential use is exempt.Will the rent for my residential apartment increase because of SST? No, the rental or leasing of residential buildings is explicitly exempt from the new 8% service tax on rental and leasing services. This exemption applies regardless of the landlord's income.How does the SST affect serviced apartments on commercial land? Construction services for serviced apartments built within a "mixed development" project approved by local authorities are generally subject to the 6% service tax on the total building value, even if they are used for residential purposes. This is a key concern for developers regarding potential price increases for buyers.Does the 8% SST apply to all commercial rental income? No, the 8% SST on commercial rental/leasing services applies only to the service provider if their annual rental income exceeds RM500,000. Rentals of assets located outside Malaysia, financial leases, renting reading materials, and possibly rentals where the tenant is an MSME with sales under RM500,000 are exempt.As a homebuyer, what steps should I take to understand how the SST might impact me? Focus on confirming whether the property you're interested in (especially in mixed developments) is subject to taxes on construction services, and discuss any potential tax impacts on the final price directly with the developer. While general residential construction is exempt, projects involving commercial elements may be indirectly affected, potentially influencing costs.Do you have further questions about the SST's impact on your specific property or business situation? Don't go it alone! Connect with us to help you make the best move in Malaysia's evolving real estate market.[custom_blog_form]Continue Reading:Robert Kuok Real Estate Business: From Sugar to CityscapesKuala Lumpur Market Insights 2025: Economy, Jobs & Real EstateThe Trump Real Estate Empire: Inside His Iconic Property PortfolioReference and Citation

Version: CN, BMStarting July 1, 2025, major changes to Malaysia’s electricity tariff structure and service tax (SST) are expected to affect homeowners, tenants, landlords, and investors alike.  With Tenaga Nasional Berhad (TNB) introducing a more detailed billing structure and SST applying to higher electricity usage, the real estate sector must brace for rising operational costs and shifting affordability. In this article, we’ll break down what the changes are, why they’re happening, and how they could affect real estate, plus practical tips to manage your electricity bills under the new system. Understanding TNB's NEW Tariff & SST Charge: What Is the New TNB Tariff & SST Policy?  Why Is the Government & TNB Doing This?  New TNB Domestic Tariff (July 2025)  How Will This Affect the Real Estate Market?  Overall Market ImplicationsHow to Reduce Electricity Bills Under the New Tariff  Final Thoughts  Frequently Asked Questions (FAQ's)What Is the New TNB Tariff & SST Policy? Effective July 1, 2025, TNB will roll out a new electricity tariff structure under the government’s Regulatory Period 4 (RP4).  This includes a five-part breakdown of charges to enhance billing transparency, along with the implementation of 8% SST on households using more than 600 kWh/month. Breakdown of the New Tariff Components: Energy (Generation) Charge – Cost to generate electricity Capacity Charge – Cost of maintaining supply availability Network Charge – Cost of delivering power through TNB’s grid Retail Charge – Customer service, billing, and meter reading Automatic Fuel Adjustment (AFA) – Monthly fuel cost variations, capped at ±3 sen/kWh Why Is the Government & TNB Doing This? The revised tariff is part of a national effort to: Reflect the true cost of electricity supply more transparently Encourage energy efficiency through usage-based incentives Replace the older ICPT mechanism with AFA for more timely adjustments Support national sustainability goals by discouraging energy waste TNB and the Energy Commission (Suruhanjaya Tenaga) argue that this change brings Malaysia closer in line with international energy billing standards while shielding low-income households from excessive hikes. New TNB Domestic Tariff (July 2025) Here’s a simplified version of the new domestic electricity charges for consumers: Component Usage ≤ 1,500 kWh Usage > 1,500 kWh Energy Charge 27.03 sen/kWh 37.03 sen/kWh Capacity Charge 4.55 sen/kWh 4.55 sen/kWh Network Charge 12.85 sen/kWh 12.85 sen/kWh Retail Charge RM10/month (waived if ≤600 kWh) RM10/month SST (8%) Applies if usage >600 kWh/month Applies Note: Households using ≤600 kWh/month are exempt from the RM10 retail charge and SST. How Will This Affect the Real Estate Market? 1. For Homebuyers Rising electricity costs, especially for homes that consume more than 1,500 kWh/month mean higher cost of ownership.  For homebuyers, the rise in electricity tariffs could reshape purchasing decisions and priorities. As energy bills become a more prominent part of monthly expenses, buyers may begin to scrutinise a property's energy performance just as closely as its location or layout. Homes that lack proper insulation, ventilation or energy-saving features may be viewed as long-term financial burdens, particularly for first-time buyers already stretching their budgets. Additionally, higher construction costs brought on by increased operational expenses could push property prices upwards, making affordability an even bigger challenge. In response, homebuyers may start to favour properties with solar panels, energy-efficient appliances or green building certifications, viewing them as a better investment over time.This could result in: New homes might become more expensive as building costs are going upPeople may avoid buying homes that are not energy-efficient2. For Tenants For tenants, particularly those in energy-intensive units or older buildings, the higher electricity tariffs could significantly reduce disposable income. Monthly utility bills could rise sharply, especially in units that rely heavily on air conditioning, water heaters or outdated electrical systems. This financial strain may cause tenants to seek smaller, more efficient units or negotiate for lower rents. The result could be a reduced demand for high-maintenance properties, especially in markets saturated with supply.This could result in: Higher monthly rents Strained affordability 3. For LandlordsLandlords are likely to face increased pressure as tenants grow more cost-conscious. To maintain occupancy rates and remain competitive, they may need to upgrade properties with energy-efficient fixtures or offer incentives to tenants concerned about high utility costs. Retrofitting older units with modern solutions like inverter air-conditioners, LED lighting or solar-powered water heaters may no longer be optional, but a necessity. While these investments require upfront capital, they could enhance long-term property value and attract more stable, sustainability-minded tenants. Landlords unwilling or unable to adapt may face longer vacancy periods or be forced to lower rental prices to retain interest.This could result in: Risk of lower rental incomePressure to upgrade units4. For Investors & Developers Commercial properties, especially those with higher energy needs such as Small-office Home-office (SoHo) or Small-office Versatile-office (SoVo) units, are likely to feel the brunt of increased electricity tariffs. With operating costs on the rise, property owners and investors could face shrinking profit margins as they contend with larger utility bills and higher service charges. Over time, this could affect the financial viability of energy-intensive developments, prompting a shift in investor preferences toward more sustainable, energy-efficient projects with lower running costs.Projects using commercial titles (e.g., SoHo, SoVo) will face higher service charges. This impacts: Rental yields Long-term operational expenses Development pricing, particularly for energy-intensive properties Overall Market Implications1. Impact on Affordability and Transaction VolumeHigher energy costs add to the overall cost of living and homeownership. This added financial strain could slow down property transactions, particularly in lower to middle-income segments where budgets are already tight. Buyers and tenants may delay decisions or opt for more affordable, lower-maintenance alternatives.2. Possible Government InterventionTo cushion the impact of rising tariffs, government support may become more likely. This could come in the form of energy rebates, tax relief for green upgrades or new financing schemes aimed at encouraging sustainable homeownership and development. Such interventions would help stabilise the market while guiding it toward a more energy-conscious future.3. Shift in Buyer and Tenant PreferencesThe increase in electricity tariffs is pushing both buyers and renters to become more selective. Properties that are not energy-efficient (especially older buildings) are becoming less desirable due to higher monthly utility costs. As affordability becomes a growing concern, demand is expected to shift towards homes that offer lower energy consumption through smart designs, green certifications or modern energy-saving systems.4. Market Moving Towards Compact and Sustainable LivingIn the long term, rising utility costs may lead the market to embrace smaller, more efficient, and environmentally friendly homes. Compact layouts, passive cooling designs, and integrated smart systems could define the next wave of residential development making sustainability not just a trend, but a necessity.How to Reduce Electricity Bills Under the New Tariff To manage costs and stay below SST thresholds, here are some effective strategies: 1. Monitor Usage Monthly Use less than 600 kWh to avoid SST and retail charges. Consider a smart meter or app to track real-time consumption. 2. Take Advantage of Time-of-Use (ToU) Tariffs Shift heavy usage (laundry, air-conditioning, charging devices) to off-peak hours. (Weekdays: 10:00 PM – 8:00 AM, All day on weekends and public holidays.)3. Invest in Energy-Efficient Appliances Switch to LED lighting, inverter air-conditioners, and energy-rated refrigerators. These upgrades may reduce your total bill significantly over time. 4. Consider Solar Energy Installing solar panels under the Net Energy Metering (NEM) scheme can help offset your energy consumption and stabilize long-term electricity costs. 5. Claim Efficiency Rebates If your usage stays below 1,000 kWh, you may be eligible for energy efficiency rebates of up to 25 sen/kWh. Final Thoughts The new TNB tariff and SST structure may seem technical, but its impact is real especially in the context of homeownership costs, rental yields, and tenant affordability.  Whether you're buying, renting, or investing in property, understanding how electricity charges work is now more important than ever. As utility bills start playing a bigger role in real estate decisions, staying informed and energy-smart will give you a clear edge. Frequently Asked Questions (FAQ's) When will the new TNB tariff and SST changes take effect? The new tariff structure and SST changes will apply starting July 1, 2025.Who will be charged SST on their electricity bills? Households consuming more than 600 kWh per month will be subject to 8% SST on their electricity bills.How will the new TNB tariff impact property buyers and renters? It may increase monthly utility costs, leading to higher homeownership expenses and potential rent increases.What is one way to reduce electricity bills under the new tariff system? Shifting electricity use to off-peak hours through the Time-of-Use (ToU) scheme can help lower bills.Looking to invest in property or buy your dream home? Connect with our expert agents today to discover the best and most affordable options tailored to your needs.[custom_blog_form]Continue Reading: US Tariffs: How Are They Affecting Malaysia Real Estate?Budget 2025 Malaysia: RM900 Million For Affordable Housing, Tax Break and More!Smart Home Trends for 2025: The Future of Connected Living

Version: CN, BMFinding the best house loan interest rates in Malaysia can be challenging, especially with various options available. Critical terms like home loan, housing loan, and loan tenure are crucial for making informed decisions. This guide will help you navigate the different types of loans, their interest rates, and other essential aspects to consider when looking for a dream home.In July 2025, several financial institutions in Malaysia offer competitive house loans and home financing options. Here's a quick overview:1. Best Housing Loan Rates in July 2025Bank NameHouse Loan NameProfit RateFinancing TypeTenureLock-In PeriodMaybank IslamicHouzKEYFrom 2.88% p.a.Term Islamic FinancingUp to 35 years1 YearBank IslamBaiti Home Financing-iFrom 3.8% p.a.Term Islamic FinancingUp to 35 years / age 70NoneStandard CharteredMortgageOneMortgage One Zero CostFrom 3.9% p.a.From 4.2% p.a.Full-Flexi loanUp to 35 yearsNoneBank of ChinaHousing LoanFrom 3.88% p.a.Term loanUp to 35 years3 YearsPublic Bank5 Home PlanFrom 4.22% p.a.Semi-Flexi loanUp to 35 years3 YearsSource: RinggitplusThese banks offer a range of housing and home loans that cater to different needs, whether you're looking for a flexible or term loan.Understanding Housing Loan Rates: 1. Best Housing Loan Rates in July 20252. Understanding the Effective Lending Rate (ELR)3. Understanding House Loan Interest Rates4. How Should You Compare Lending Rates Across Banks as Borrowers?5. How to Plan and Compare Your House Loan Interest Rates?Critical Terms in Home Financing1. Maybank Islamic HouzKEYSource: MaybankRequirementsCriteriaAge18 to 70 years oldEligibilityMalaysian citizen onlyMust not have more than one (1) home financing at the point of applicationSalaried employee, Self-employedUp to 3 guarantors allowedSource: MaybankFees & ChargesCriteriaLate Penalty Fee1% p.a. on the outstanding amountProcessing FeeNo FeeEarly Settlement FeeNo FeeSource: MaybankBenefitsDescriptionFull 100% FinancingGet full financing with no downpayment requiredNo Payment During ConstructionWe help to finance the cost during construction.LOWEST Monthly PaymentEnjoy the lowest monthly payments with the best rates.Source: MaybankYou may visit the Maybank website for more information.2. Bank Islam Baiti Home Financing-iRequirementsCriteriaAgeAge 18 and aboveMinimum Annual IncomeRM24,000EligibilityMalaysian CitizenNot a bankrupt or have any legal actionGainfully employed or Profitable business for at least 3 yearsMinimum 1-year good payment track recordSource: Bank IslamFees & ChargesCriteriaLate Penalty Fee1% p.a. on the overdue installments until the date of full payment, and this applies to the Facility before maturity. If after maturity, you will be charged with a sum equivalent to the prevailing daily overnight Islamic Interbank Money Market Rate on the outstanding balance i.e., outstanding Sale Price less Ibra’, if anyProcessing FeeWaivedEarly Settlement FeeThere is no 'lock-in period' for this Facility, and Bank Islam shall grant Ibra' on the deferred profit after full settlement is made.Redemption Letter FeeThere is no 'lock-in period' for this Facility, and Bank Islam shall grant Ibra' on the deferred profit after full settlement.Letter for EPF Withdrawal FeeRM20 per requestInsurance TypesMRTTMLTTHouseowner/Householder TakafulSource: Bank IslamBenefitsCriteriaMargin of financingHigh Margin of financing up to 90%No compounding elements-No penalty for early settlement-Tenureup to 35 years or age 70No lock-in period-Source: Bank IslamYou may visit Bank Islam website for more information.3. Standard Chartered MortgageOneSource: Standard CharteredRequirementsCriteriaAge21 to 70 years oldMinimum Gross IncomeRM4,000 / monthEligibilityMalaysians onlySalaried employee, Self-employedSource: RiggitPlusFees & ChargesCriteriaLate Penalty Fee1% p.a. of the outstanding amountProcessing FeeRM200 setup fee for MortgageOne™Early Settlement FeeNILRedemption Letter FeeRM50 per requestLetter for EPF Withdrawal FeeRM20 per requestCancellation Fee2.25% of the loan amount if the bank bears the entry cost. Otherwise, it's 0.5%Insurance TypesFire InsuranceMRTASource: RiggitPlusBenefitsDescriptionRedraw FacilityWithdraw excess cash paid into your home loan account for personal use at any time without restrictions and penalty.Priority Banking privilegeIf you're a Standard Chartered Priority Banking customer, the bank might offer you lower interest rates (subject to approval).Source: RiggitPlusYou May visit the Standard Chartered website for more information.4. Bank of China Housing LoanRequirementsCriteriaAge18 to 70 years oldMinimum Annual IncomeRM60,000EligibilityMalaysiansPermanent Residents, Foreigners working in MalaysiaSalaried employee, Self-employedSource: RiggitPlusFees & ChargesCriteriaLate Penalty Fee1% p.a. on the amount in arrears causing the total outstanding to increaseProcessing FeeWaivedEarly Settlement Fee2.25% Prepayment/Full settlement within the first 3 years from the date of first release of the loanInsurance TypesFire Insurance (Mandatory)Houseowner Insurance (Optional)MRTA (Optional)MLTA (Optional)Source: RiggitPlusYou may visit the Bank of China Malaysia website for more information5. Public Bank 5 Home PlanSource: Public BankRequirementsCriteriaAge21 to 70 years oldMinimum Annual IncomeRM24,000EligibilityAny nationalitySalaried employee, Self-employedSource: RiggitPlusFees & ChargesCriteriaLate Penalty Fee1% p.a. of the outstanding amountWithdrawal FeeRM50 Processing FeeRM50 to RM200, depending on the financing amountEarly Settlement Fee2% to 3% within 3-year retention period, depending on loan sizeRedemption Letter FeeRM50 per requestLetter for EPF Withdrawal FeeRM20 per requestInsurance TypesMRTASource: RiggitPlusYou may visit the Public Bank website for more information2. Understanding the Effective Lending Rate (ELR)Source: Bank Negara MalaysiaThe Effective Lending Rate (ELR) is a critical component when evaluating home loans. It represents the total cost of borrowing, expressed as an annual percentage rate. The ELR includes the reference rate and the spread, which collectively impact your monthly repayments.Reference Rate: This is the base rate, like the Standardised Base Rate (SBR), which is influenced by Bank Negara Malaysia's policies.Spread: Additional charges include credit and liquidity risk premiums, operating costs, and the bank’s profit margin.The ELR is crucial as it affects the total repayment amount and helps borrowers compare different loan products effectively.What is the Reference Rate?Source: Bank Negara MalaysiaThe reference rate is a benchmark interest rate used by Malaysian banks to determine the changes in borrowers' repayments on floating-rate loans throughout the tenure. This rate can vary between institutions but is a foundation for setting the lending rate.Is the Reference Rate Equal to the Standardised Base Rate (SBR)?No, the reference rate differs from the Standardised Base Rate (SBR). The SBR is a specific reference rate that standardizes the base rate across all banks. Introduced on 1 August 2022, the SBR is directly linked to the Overnight Policy Rate (OPR) set by Bank Negara Malaysia. This standardization aims to simplify the comparison of loan rates across different banks.Is the Reference Rate Equal to the Overnight Policy Rate (OPR)?The reference rate can include the OPR as a component, especially when the SBR is used. The OPR is the interest rate at which banks lend to each other overnight and is set by the central bank. Changes in the OPR directly influence the SBR, affecting the reference rate used for loans.What is Spread?The spread is an additional percentage added to the reference rate to arrive at the ELR. It covers various costs and risks incurred by the bank, including:Credit Risk Premium: Compensation for the risk that a borrower might default.Liquidity Risk Premium: Compensation for the risk associated with the bank’s liquidity.Operating Costs: Day-to-day costs of running the bank.Profit Margin: The bank’s earnings from the loan.The spread is generally fixed for the duration of the loan unless there is a significant change in the borrower’s credit risk profile.3. Understanding House Loan Interest RatesUnderstanding the mechanics of interest rates and how they impact repayments is essential for making informed decisions about Malaysian house loans.What are House Loan Interest Rates?House loan interest rates are the percentage banks charge on the loan's principal amount. These rates determine the cost of borrowing and are influenced by various factors, including the central bank’s policies and the individual bank's cost structures.How to Calculate House Loan Interest Rate?Source: Bank Negara MalaysiaCalculating your home loan interest rate is essential for understanding how much you will pay over time.Use a home loan calculator to determine your monthly instalments and total repayment. Here’s an example:Example Calculation:Bank’s Base Rate (BR): 2.00%Spread: 1.50%ELR: BR + Spread = 2.00% + 1.50% = 3.50%For a loan amount of RM300,000 over 30 years, the monthly instalment would include the interest and principal repayment. Understanding these calculations can help you save money and manage your loan tenure effectively:Annual Interest Amount: RM300,000 x 3.50% = RM10,500Monthly Interest Amount: RM10,500 / 12 = RM875Thus, the monthly repayment would include RM875 in interest plus the principal repayment.What Can Affect Your House Loan Interest Rate?Several factors can influence your house loan interest rate, including:Central Bank Policies: Changes in the Overnight Policy Rate (OPR) by Bank Negara Malaysia can directly impact interest rates.Economic Conditions: Inflation and economic stability can influence interest rates.Borrower’s Credit Score: Higher credit scores often result in lower interest rates.Loan Tenure: Longer loan tenures can sometimes attract higher interest rates.4. How Should You Compare Lending Rates Across Banks as Borrowers?Comparing lending rates across banks involves more than just looking at the ELR. Consider the following steps:Review the ELR and Spread: Compare the total cost of borrowing.Understand Additional Fees: Be aware of any extra fees that might apply.Read the Product Disclosure Sheet (PDS): This document provides crucial details about the loan.5. How to Plan and Compare Your House Loan Interest Rates?When planning a home loan, consider the property value, loan amount, and loan tenure. Use a loan calculator to estimate your monthly instalments and ensure you understand all associated fees. Planning and comparing Malaysia house loan interest rates require a strategic approach:Research Different Lenders: Identify potential lenders and their offerings.Interest Rates: Compare the interest rates offered by different banks.Additional Features: Evaluate foreclosure charges and other loan features. Some loans include extra funds withdrawal or linked current accounts for easier management.Read Reviews: Learn from the experiences of other borrowers.Seek Professional Advice: Consult with financial advisors if needed.Maximum Loan Tenure: Most banks offer up to 35 years.Prepayment Options: Check if the bank allows for additional payments without penalties.Insurance Requirements: Most housing loans require Mortgage Reducing Term Assurance (MRTA) or other types of insurance.Flexibility: Compare loans that offer flexible repayment options, like a flexi loan or semi-flexi loan (make sure to understand the terms and conditions).Critical Terms in Home FinancingUnderstanding key terms related to home financing is crucial for navigating the market:Outstanding Principal Balance: The remaining amount you owe on your loan, excluding interest.Home Loan Balance: The total amount left to pay on your home loan.Basic Term Loan: A standard loan with fixed interest rates and repayment terms.Loan Period: The total time over which you will repay the loan.Mortgage Reducing Term Assurance: Insurance that decreases as your loan balance decreases.Choosing the right house loan or home loan in Malaysia requires careful consideration of several factors, including the interest rate, loan tenure, and associated fees. By understanding the options available and using tools like a home loan calculator, you can make a more informed decision that aligns with your financial goals and helps you secure your dream home.Are you looking for a dream house after getting the best house loan interest rates? We can assist you! Send us your details, and we will contact you soon! [hubspot portal="5699703" id="85ebae59-f425-419b-a59d-3531ad1df948" version="undefined" type="form"]Continue Reading:OPR Remains at 3%: How Does This Affect Housing Loans?Is Now the Perfect Time to Invest in Malacca’s Property? Explore Malacca’s Potential!Fixed Deposit: Which Bank Has the Best FD Rates for July 2024? + Quick Guide to Fixed Deposits (FD & FD-i)