Low Cost Housing Policy
Overview
Housing developers are required to build low cost housing in proportion to the total unit scale of their development.
This is in line with the National Housing Policy, which aims to provide accessible, adequate, affordable and quality housing for all Malaysians, particularly the low-income group.
In 1982, the Government imposed a 30% low-cost housing quota upon private sector developers as a social obligation to complement Government efforts to provide affordable housing. Housing projects exceeding 5 acres have to allocate at least 30% of houses as low cost units. This is also in line with building developments with a balanced socio-economic mix.
Under this policy, the number of units is allocated according to its price range namely low cost, low-medium cost and medium cost.
In Malaysia, land matters come under the State jurisdiction. Therefore, the exact allocation is determined by the respective States.
Although Malaysian private developers have achieved tremendous success in the provision of low-cost housing, REHDA believes that the nation has moved on substantially—socially and economically—such that this responsibility can now fully revert back to the Government.
Kedah / Perlis
- < 49 units: No low-cost housing required.
- Development between 50-99 units: 20%
- Development more than 100 units: 30%
- Projects built on Malay Reserved Land and sold 100% to Malaysia: No low-cost housing required
Pulau Pinang
- Development more than 100 units: 30% (inside development areas)
- Development more than 150 units: 30% (outside development areas)
- The State Government also allows financial contribution in lieu of the low cost provision for:
- Development of more than 4 units to 99 units (inside development areas)
- Development of more than 4 units to 149 units (outside development areas)
- The quantum of the contribution is determined by the State Government based on size, price, location and type of development.
Perak
- 20% to 30% of development depending on the Local Authority
Selangor
Residential Developments
For Development 10 acres and above
|
Within Klang Valley |
Outside Klang Valley |
Low cost: |
20% |
20% |
Low medium cost: |
20% |
10% |
Medium cost: |
10% |
10% |
For Developments 50 units and above
|
Within Klang Valley |
Outside Klang Valley |
Medium cost: |
30% |
30% |
Commercial Developments
- For Development of 50 units and above: 20% low-cost commercial units (Selling price of RM120,000)
Industrial Developments
- For Development of 10 acres and above: 30% low-cost industrial units (Selling price of RM150,000)
Kuala Lumpur
- 30% of total development
- Private developers can opt to pay a contribution at RM3,250 per unit for total units approved in lieu of such quota.
Negeri Sembilan
- Development on private land: 30%
Melaka
Development of more than 8 acres: 30%
For commercial developments, multi-storey buildings and bungalow lots of more than 8 acres, financial contribution in lieu of the low cost provision is as follows:
Price Category (RM) |
Contribution / Unit (RM) |
40,001 – 50,000 |
2,000 |
50,001 – 60,000 |
3,000 |
60,001 – 70,000 |
4,000 |
70,001 – 80,000 |
5,000 |
80,001 – 90,000 |
6,000 |
90,001 – 100,000 |
7,000 |
100,001 – 110,000 |
8,000 |
110,001 – 120,000 |
9,000 |
120,001 – 130,000 |
10,000 |
130,001 – 140,000 |
11,000 |
140,001 – 150,000 |
12,000 |
150,001 – 200,000 |
13,000 |
200,001 and above |
15,000 |
Vacant bungalow lots |
15,000 |
Exemption is given if:
- 100% of the development consists of low-cost housing
- The development consists of low-cost and medium cost houses
- The development consists of tourism and industrial projects
Johor
All developments need to allocate 40% of their housing units to affordable housing, broken down to the following:
- Low-cost housing: 12%
- Low-medium cost housing <RM50,000 per unit: 12%
- Low-medium cost housing <RM80,000 per unit: 12%
- Shop houses priced at RM150,000: 4%
Kelantan
- Only developments on alienated land are imposed with a 30% quota.
Sarawak
- For Mixed Zone Land Development
- Developments below 10 acres: No quota
- Developments above 10 acres: 15%
- Developments of 10 to 15 acres: 15% to 30%
- Above 20 acres: 30%