Bumiputera Housing

Housing developers in Malaysia are required to set aside at least 30% of their development housing for the bumiputera, as well as provide a discount of 5 – 15%. This has been in place since the introduction of the National Economic Policy in the 1970’s, which was implemented to balance out the socio-economic imbalances experienced by the bumiputera. This policy was set in place to encourage more bumiputera to own houses and to promote greater interaction among the various ethnic groups living in Malaysia.

The success of this policy in achieving a balance of socio-economic structure is obvious, 30 years down the road. The continued implementation of the policy has resulted in holding costs and inefficiencies in the delivery system. Although lots allocated for bumiputera ownership can be released to the open market upon approval by the State government, this only marginally reduces the inefficiencies. REHDA is currently advocating that the country move away from this requirement.

bumiputera housing quota
60% allocation for low cost housing
30% to 50% allocation for other categories of low cost housing

Allocation for Malays
100% - Malay Reserved Land
50% - on Malay Reserved Land
30% - on Freehold Land

Discount
5% off market selling price

Endorsement on Title
The title is endorsed. The Lands and Mines Office will endorse lots as “Lot untuk orang Melayu Sahaja”.

Release of Allocated Lots
Procedure for application:

1. Submission of application on the 9th of the month from the date of advertisement / sales license.
2. Architect’s certification of projects reaching at least 50% completion.
3. Submission of progress report of “Lot Melayu” unit sales
4. On getting release letter from Bahagian Perumahan, Setiausaha Kerajaan Negeri Kedah, submit to the State Government for approval from EXCO.

The Kedah State EXCO would decide on the release of bumiputera quota on a case to case basis.

bumiputera housing quota
30% allocation for all property development for sale

Discount
5% off market selling price

Endorsement on Title
The Local Authority for Mainland Penang will indicate which units are reserved for bumiputera buyers at the sub-division stage of landed property. This is not endorsed on the qualified titles.

Release of Allocated Lots
Developers may apply for release of these lots when:

• Construction progress at site has achieved 65% - 85% (95% in some cases)
• They have advertised 3 times in the newspaper within 6 months from the date of the first advertisement
• They have a obtained a release letter from the State Housing Department to procure CF
• Contribution for the released units should be paid to “Bendahari Negeri Pulau Pinang” and is fixed at 30% of the 5% discount due on any unsold bumiputera units

bumiputera housing quota
30% of units for state alienated land and private land are allocated for bumiputera ownership.

Discounts
A minimum of 5% discount except for low-cost housing.

Endorsement on Title
No endorsement on title. However, the Menteri Besar’s consent is required for sub-sale of bumiputera lots.

Release of Allocation / Remarks
Developers may apply 6 months from the first advertisement in local papers provided that construction has reached 50% completion.
Developers must show proof of:

• Having placed at least 2 advertisements in local Bahasa Malaysia and English newspapers (Minimum ½ A4 sized paper)
• Having placed 5 radio advertisements.

Release of allocation is not applicable for low-cost housing.

bumiputera housing quota
30% of housing development.

Discount
5% of market price

Endorsement on Title
Endorsed. (Most Perlis land are Malay Reserved)

Release of Allocation / Remarks
Perlis State Exco decides on a case-to-case basis.

bumiputera housing quota
For residential areas, the allocation is based on areas of State Constituencies (ADUN), according to the Blueprint Perumahan Negeri Selangor Darul Ehsan (2004-2014) by Lembaga Perumahan dan Hartanah Selangor (LPHS).

For commercial areas of less than 50 units, the proportion allocated depends on the Lands and Mines Office. For commercial areas of more than 50 units, the allocation is 60% for low cost (Market Price of RM120,000) and 50% for other pricing.

For industrial areas less than 10 acres, 40% are allocated for bumiputera ownership. For industrial more than 10 acres, an allocation of 50% of low cost (Market price of RM150,000) and 40% for other pricing.

Discount
7% off market selling price for housing
10% off market price for commercial property (except low cost)
10% off market price for for industrial property

Endorsement on Title
The allocation is not endorsed on the title. Since 2005, bumi lots are marked for 6 months from project launch.

Release of Allocation
Developers may apply for release of these lots when they have advertised their property at LPHS for 3 months and were not able to have bumiputera buyers.
Contribution is given to the State Government for the release or reduction of the allocation at the following rates:

• Residential areas: 7% of the selling price per unit released
• Commercial areas: 10% of the selling price per unit released
• Industrial areas: 10% of the selling price per unit released

bumiputera housing quota
30% allocation for all property development for sale

Discount
5% discount on market price.

Endorsement on Title
The Kuala Lumpur City Council (Dewan Bandaraya Kuala Lumpur) decides before the bumiputera allocation can be sold to others.

Release of Allocation
Stage 1

• Developer may apply for release of allocation when construction progress has reached 50% completion subject and all non-Bumi units have been sold. The develop should also be promoting the said property units by advertising (minimum of 3 advertisements) in Malay and English newspapers, participating in property exhibitions and other promotions.
• Developer is required to submit copies of the advertisement as proof.
• Within 3 months after application, DBKL will consider giving release on a staggered basis on a maximum of 30% of remaining unsold units.
• The developer is required to re-advertise the remaining unsold units.

Stage 2

• Developer may re-apply for release of the unsold Bumi units when the project has reached 80% completion of construction, but developers have to re-advertise and participate in DBKL’s bumiputera Property Exhibition.
• DBKL will consider releasing the units on a staggered basis within 3 months of application.
• Developer should re-advertise remaining unsold Bumi units and participate in DBKL’s cluster advertisement.

Stage 3

• Upon full completion, the developer may re-apply for release of unsold bumiputera units subject to re-advertising conditions.
• Developer will consider releasing all remaining unsold Bumi units within 6 months from the issuance of Certificate of Fitness (CF).
• Since 18 May 2007, developers are required to contribute a sum to DBKL for release of unsold Bumi quota units. The quantum of the contribution is equivalent to the discount for bumiputera.

bumiputera housing quota
A minimum of 30% of housing and commercial projects to be allocated for bumiputera ownership

Discount
10% discount. Not applicable for low-cost housing.

Endorsement on Title
Endorsed.

Release of Allocation / Remarks
Negri Sembilan State Exco decides on a case-to-case basis.

bumiputera housing quota
For residential areas, 60% are allocated for areas in Melaka, while 40% for areas in Kesidang, Kota Laksamana and Bandar Hilir (Kawasan Kota Melaka).

For commercial areas, 35% for areas in Kawasan Kota Melaka and Kawasan Bukit Katil. 40% for all other areas.

Discount
5% to 15% allocation based on selling price.

Endorsed on Title
The allocation is endorsed on the title

Release of Allocation
Developers may apply for release of allocation:

• After construction reaches 65% as certified by the registered architect

Developers are required to:

• Place at least 6 advertisements in newspapers with a minimum size of 16cm x 16cm
• Place radio advertisements 14 times in 2 weeks
• Developers must register with PERTAM Properties Sdn Bhd
• Pay contribution at 5% to 15% of sales price for Malay Quota Emission (MQE)
• Only those who have having the MQE can appeal for existing balance of quota after 3 months from the approval date

Permanent Entitlement for Malay Quota:
Rural area: 30% housing lots and 10% business lots
Town area: 10% of housing lots and business lots

The release of allocated units for bumiputera is at the discretion of the State Government.

bumiputera housing quota
For conversions approved before 11 December 2004, 40% for all residential, commercial and industrial developments are allocated for bumiputera ownership.
For conversions approved after 11 December 2004, all residential property are subject to the following allocations:
Selling price of less than RM200,000: 40%
Selling price of RM200,001 – RM300,000: 30%
Selling price of more than RM300,001: 20%

Discount
15% discount on market price

Endorsement on Title
The title is endorsed. A bumiputera owner who wishes to resell the title to a non-bumiputera must seek approval from State Authorities.

Release of Allocation / Remarks

Developers may apply for release of allocation after 65% of the construction has been certified as complete by Registered Architect.
Developers must show that they have:

• Placed at least 6 advertisements in newspapers (minimum size of 16cm x 16 cm)
• Placed radio advertisements 14 times in 2 weeks
• Registered with PERTAM Properties Sdn Bhd and that the selling price of the units have been certified by the same
• Paid contribution at 5% to 15% of sales price for Malay Quota Emission (MQE)

Only developers who have the MQE may appeal for the existing balance of quota after 3 months from the approval date.

Permanent Entitlement for Malay Quota
Rural areas: 30% of housing lots and 10% of business lots
Town areas: 10% of housing lots and business lots

Note: Release of the bumi units is at the discretion of the State Government

bumiputera housing quota
Minimum 30% allocated for bumiputera ownership. The State Exco’s final decision on the percentage depends on the location of the project.

Discount
No set percentage

Endorsement of Title
Endorsed under “Restriction in Interest” as “Lot ini dikhaskan untuk bumiputera sahaja” (This lot is reserved for bumiputera only).

Release of Allocation / Remarks
Developers may apply for release after showing:

• CFO has been obtained at least a year
• Advertisements have been placed at least 3 times in Malay newspapers
• Placement of signage “Lot bumiputera untuk dijual” (bumiputera lot for sale) at the property and other efforts by the developer to sell the property.

bumiputera housing quota
35% allocation for government land. 25% allocation for private land.

Discount
No specific percentage.

Endorsement on Title
Not endorsed but may require State’s consent for transfer

Release of Allocation / Remarks

Developers may apply for release of allocation:

• After 3 months from launch date
• After placing 3 advertisements in newspapers

Release of the units is at the discretion of the State Government and not automatic.