SC proposed requirements for crowdfunding home buyer in Malaysia
SC Proposed requirements in relation to a homebuyer
The property crowdfunding scheme is to enable a first-time homebuyer to access funding to purchase his first residential property. Whilst there is no definition of the term “first-time homebuyer”, the SC is guided by the various government incentives relating to a first-time homebuyer. For example, under My First Home Scheme, the government has defined a first-time homebuyer to be an individual Malaysian citizen up to the age of 40 years and purchasing his/her first home. Under PRIMA Special Financial End Financing Scheme 9 , to be a homeowner of a PRIMA house, the person must be a Malaysian citizen who is above 21 years old and owns no more than one property between the person and his
Set against this backdrop and to ensure consistency with other government initiatives, the SC is proposing to define a first-time homebuyer as–
(a) an individual Malaysian only;
(b) who is at least 21 years old; and
(c) has never owned a property whether solely or jointly.
The scheme must operate on the basis that a homebuyer will not be able to obtain 100% financing from investors under the scheme. It is expected that the homebuyer must put up the initial amount for the property to show his commitment to the scheme. In this regard, the SC is proposing that a homebuyer must put up a minimum of 10% or maximum 20% of the property price as the initial amount.
Correspondingly, it is also proposed that a homebuyer will only be able to raise
funding up to 90% of the property price.
Obligation of a homebuyer
The SC is proposing to impose obligations on a homebuyer to ensure that the property will not be used for speculative purposes. In this regard, the SC is proposing that–
(a) a homebuyer is not allowed to sell or transfer the property during the scheme’s tenor;
(b) the property must be occupied by the homebuyer at all times. A homebuyer, however, will be permitted to rent out rooms in the property during the scheme’s tenor;
(c) the homebuyer should use his best endeavour to maintain the property in
good condition during the scheme’s tenor; and 10 Newly completed properties refer to new properties which are completed within 24 months prior the date of the property being hosted on the platform.
(d) the homebuyer must inform the platform operator of any material adverse change during the period of the scheme, for example, any irreparable damage to the property, confiscation of the property by any authorities or the inability of a homebuyer to fulfil his obligations.
It is expected that a platform operator will set out the consequences that a homebuyer will bear in the event there is a breach of the above obligations. For example, where a property has been damaged during the scheme’s tenor, the homebuyer may be required to pay for the cost of repair.
For more information please visit: https://www.sc.com.my