When we think about buying a house, we always think about how much money we would have to save and raise to barely even cover the initial deposits involved.
Unfortunately for most of us, as we slowly accumulate and grow our savings, so does the cost of the house deposits. With the rise of property prices comes the rise of the deposits.
A shortcut to overcoming this is by utilizing your EPF funds and withdrawing from your EPF Account 2. EPF or as it stands for Employees Provident Fund means they exist to be mindful and to facilitate the employees funds for their best possible future needs.
Credit : Astro Awani
In other words, EPF was established to sort of ‘force’ employees to save a certain amount of their monthly income to be used to secure liabilities after their pensions.
Just imagine how many of us would be unaccounted for with no funds allocated if EPF did not exist?
Everyone owns 2 EPF Accounts
1. Account 1: 70% of your deducted salary will stored into this account and can be released when the member reaches age 55 or has made a full withdrawal through leaving the country, Incapacitate, or made a Pensionable Employees/Death Withdrawal
2. Account 2: The remaining 30% of your deducted salary is stored in this account and a withdrawal can be made to fund the purchase of a house and many more.
It is clear by now that you are allowed to use these funds. The question now is how
Basically, the formula is as follows:
(House Price – Loan Amount) + 10% of House Price = Maximum Amount of EPF Withdrawal
After identifying the withdrawal amount, you are also advised to check whether you are eligible to apply.
1. Malaysian & Non-Malaysians
2. Below 55 years of age
3. At least RM500 in Account 2
4. Purchasing residential home
You will not be eligible if you are:
1. Purchasing land or a land lot;
2. Conducting renovation, repairs or additional modifications to your current
3. Already own property from previous sale and/or purchase transactions;
4. Applying for a loan with an overdraft facility;
5. Purchasing a third house;
6. Purchasing foreign property;
Conditions of Withdrawal from EPF Account 2
1. Amongst the types of residential homes you can purchase include bungalows, terrace house, semi-detached houses. apartments,
condominiums, studio apartments, service apartments, townhouses, SOHOs, or a shop lot with a residential unit from a developer in Malaysia
2. You must also receive an approved loan from recognized borrowers OR through rent-to-own schemes OR self-financed. There are also specific Certified financial institutions under the Financial Services Act 2013 or Islamic Financing 2013 which you can make these transactions which consist of Central/State Government or any other government financing institutions, Member & employer, Licensed Corporation/Cooperative bodies (approved by SKM) and Insurance Companies licensed by Bank Negara or other EPF recognized loan providers. Rent-to-own schemes are only allowed with State Government loan providers.
3. The Sale & Purchase Agreement must not exceed more than 3 years from the date of EPF application.
4. You must also have previously never made a housing withdrawal/have made housing withdrawal before but have sold/disposed of the property
Documents Required :-
1. Form KWSP 9C (AHL) (DS)
2. Form KWSP 3 – for mail submissions/failed thumbprint verification
3. Copy of identification documents with original for verification (Non-MyKad
4. Sales and Purchase Agreement – not more than 3 years from the date of
5. Passbook or copy of your bank account statement (for verification
6. Copy of Bank Statement with original for verification
We would also recommend you visit EPF Website to ensure that you are familiar with all their conditions to ensure you submit your best possible application.
Upon successful application, EPF typically takes no longer than 15 days to transfer the amount into your account. From thereon, its house shopping time! Looking for your dream home? Look no further than your trusted partner, Hartabumi!