7 things purchaser needs to know when purchasing your dream home with EPF

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With property price on the rise, more and more people are considering EPF withdrawal in order to help fulfil their dreams of owing a house. What do you need to know when it comes to withdrawing EPF to finance the purchase of a property? Here, we share with you 7 important things that every purchaser needs to know: 
(1)    Why are you withdrawing the savings?  

  • The purpose of withdrawal must be to finance the purchase of a house. Member can only withdraw savings in Account 2. 

(2)    Who can apply to withdraw? 

  • A Malaysian Citizen; or 
  • A Malaysian citizen who has made Leaving the Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; or 
  • A non-Malaysian who: 
    • Has become an EPF member before 1 August 1998; or 
    • Has obtained a Permanent Resident status (PR)
  • Has not reached 55 years of age at the time the EPF received your application; and 
  • Have at least RM500.00 of savings in Account 2. 

(3)    Can I withdraw my EPF to purchase a second house? 

Withdrawal to purchase a second house is allowed, provided the first house is sold or disposal of ownership of the first property has taken place. 

“Disposal of ownership” means ‘loss of ownership of the first house owned through previous EPF withdrawal’ either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase.

(4)    What are the terms of withdrawal? 

  • The purchase is by cash or financed through housing loan; 
  • Application to withdraw EPF must be made within three (3) years from the date of the Sale and Purchase Agreement. 
  • If member has bought a land and built a house on the same land simultaneously. Take note that the date of the agreement to purchase land and date of agreement to construct the house must be within 6 months’ time. 

(5)    You CANNOT withdraw EPF for following purpose:

  • Buy a land or a house lot only (without constructing anything on the land within 6 months’ time); 
  • Renovate, repair or do additional work to the existing house; 
  • Ownership of property is not via sale and purchase transaction. Example when you inherit a property;
  • An overdraft loan has been taken for this existing property; 
  • Buying a third house; 
  • Buying a house overseas. 

(6)    How much can you withdraw? 

(7)    How do EPF pay you? 

Upon full documents being received and application being approved, payment will be credited directly to member’s bank account with a panel bank duly appointed by EPF (most commercial banks are on this panel). Your bank account, of course, must be active and make sure you provide EPF with correct account number!

Useful link: http://www.kwsp.gov.my/

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