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EPF Withdrawal Scheme To Purchase/Build A House


INTRODUCTION

This scheme allows members to withdraw their savings in Account II to purchase or build a house as follows :

  • Individual purchase; or

  • Joint purchase with spouse, family members or other individuals.

This scheme also allows member to purchase a house from the developer, individual or public auction.

TERMS AND CONDITIONS

Withdrawal Eligibility

Members are eligible to apply if they :

  • Purchase/build a house or purchase a shop-house with dwelling unit;

  • Have never made any withdrawal under this scheme;

  • Have made a housing withdrawal and after 2nd January 2001 they intend to purchase/build a second house on condition that the first house which was funded from their KWSP savings has been sold;

  • Have executed the Sales and Purchase Agreement/Construction of House Agreement not more than three years on the date the application is received by the EPF;

  • Have not reached 55 years of age at the time the application is received by the KWSP;

  • Purchase a house by way of hire-purchase from parties authorized by the EPF; and

  • Purchase a piece of land and build a house on it simultaneously.

However, members are not eligible to apply if they :

  • Purchase a piece of land or a housing lot only;

  • Renovate, repair/make extension to an existing house;

  • They sell or transfer the ownership of their first house based on "love and affection" to enable them to make withdrawal for the purchase of a second house.

Amount Eligible For Withdrawal

Members can withdraw their savings as follows, whichever is lower :

  1. Individual Purchase

The difference between the price of the house and the housing loan
with an additional 10% of the price of the house
OR
The balance available in Account II.

  1. Joint Withdrawal With Spouse, Family Members or Other Individuals

The difference between the price of the house and the housing loan
With an additional 10% of the price of the house
OR
The balance available in Account II for all applicants
subject to the difference of amount stated above.

For joint purchase, the EPF will firstly process application from the first purchaser and if the amount is insufficient, only then the application from the second purchaser and so forth will be processed.

EXAMPLE 1 (Individual Purchase)

Encik Sallehuddin purchased a house costing RM75,000.00 and obtained a housing loan of RM60,000.00. He has an EPF savings of RM18,000.00 in Account II. Therefore the amount of savings he can withdraw is :

Price of The House

RM   75,000.00

Housing Loan

RM   60,000.00

Difference Between Price of The House and Housing Loan

RM   15,000.00

Additional 10% of The Price of The House

RM     7,500.00

Amount Eligible For Withdrawal

RM   22,500.00

Balance in Account II

RM   18,000.00

Amount That Can Be Withdrawn

RM   18,000.00


Since the balance in Account II is only RM18,000.00 which is less than the amount that

he is eligible to withdraw i.e. RM22,500.00, Encik Sallehuddin can only withdraw RM18,000.00.

EXAMPLE 2 (Individual Purchase Without Housing Loan)

Encik Amirul purchased a house costing RM125,000.00. He did not take any housing loan to purchase the house. He has paid RM35,000.00 to the developer. His savings in Account II is RM60,000.00.

Price of The House

RM   125,000.00

Housing Loan

NIL

Difference Between Price of The House and Housing Loan

RM   125,000.00

Additional 10% of The Price of The House

RM     12,500.00

Amount Eligible For Withdrawal

RM   137,500.00

Balance in Account II

RM     60,000.00

Amount That Can Be Withdrawn

RM     60,000.00


Since Encik Amirul has only RM60,000.00 in Account II, he can only withdraw all of his savings in Account II.

EXAMPLE 3 (Joint Purchase)

Encik Amir and Puan Syuhada purchased a house costing RM100,000.00 and they obtained a housing loan of RM100,000.00. The total savings in Account II for Encik Amir is RM9,000.00 and for Puan Syuhada is RM3,600.00.

Price of The House

RM   100,000.00

Housing Loan

RM   100,000.00

Difference Between Price of The House and Housing Loan

NIL

Additional 10% of The Price of The House

RM     10,000.00

Amount Eligible For Withdrawal By The Couple

RM     10,000.00

Balance in Account II of Encik Amir

RM       9,000.00

Balance in Account II of Puan Syuhada

RM       3,600.00

Amount That Can Be Withdrawn By Encik Amir

RM       9,000.00

Amount That Can Be Withdrawn By Puan Syuhada

RM       1,000.00

Total Amount That Can Be Withdrawn By The Couple

RM     10,000.00

 

Since both members obtained 100% housing loan, the total amount eligible to be withdrawn by the couple is only 10% of the price of the house, i.e. RM10,000.00. The EPF will firstly process withdrawal application from Encik Amir amounting to RM9,000.00 plus dividend and followed by withdrawal application from Puan Syuhada to make up the amount not exceeding RM10,000.00.
 

EXAMPLE 4 (Purchase Of A Housing Lot And Building A House Simultaneously)

Encik Nasaruddin purchased a piece of land costing RM80,000.00 on 1st January 2002 and obtained a loan of RM70,000.00. On 1st May 2002, he has signed an agreement to build a house on that land with construction cost of RM200,000.00. He has obtained a housing loan of RM100,000.00 to build the house. The calculation for withdrawal by Encik Nasaruddin is as follows :

Price of The Land

RM     80,000.00

Construction Cost of The House

RM   200,000.00

Total Construction Cost of The House and Price of The Land

RM   280,000.00

Total Loan To Purchase The Land and To Build The House

RM   170,000.00

Difference Between Construction Cost of The House and Price of The Land with The Total Loan

RM   110,000.00

Additional 10% of The Price of The House

RM     28,000.00

Amount Eligible For Withdrawal

RM   138,000.00

Balance in Account II

RM   150,000.00

Amount That Can Be Withdrawn

RM   138,000.00

 

EPF Withdrawal Scheme To Reduce/Redeem The Housing Loan

INTRODUCTION

This scheme allows members to withdraw their savings in Account II to reduce or redeem their housing loan balance for the purchase or building of a house as follows :

  • Individual purchase; or

  • Joint purchase with spouse, family members or other individuals

  • To assist spouse to reduce or redeem his/her outstanding housing loan.


TERMS AND CONDITIONS

Withdrawal Eligibility

A.   INDIVIDUAL PURCHASE

 i.   Members have an outstanding balance of housing loan with authorized financial institution for the purpose of purchasing a house or shop-house with a dwelling unit or construction of a house.

 ii.   Members have not reached 55 years of age at the time the application is received by the EPF.

 iii.  This withdrawal is solely for the purpose to reduce or redeem the housing loan under the following circumstances :

    For members who have withdrawn their savings to purchase/build a house prior to November 1994, they can withdraw their savings under this scheme for any house they have purchased or built; or

    If members have withdrawn their savings to purchase/build a house after November 1994, members can withdraw their savings under this scheme for the same house only; or

                 If members have never made any housing withdrawal before this, members can

     withdraw their savings under this scheme for any house; or

     Members have purchased/built a second house before 2nd January 2001 on condition that the first house has been sold. The first house is the house purchased/built based on the latest EPF record except for the house involved with Housing Withdrawal Scheme To Reduce/Redeem Housing Loan Balance for spouse effective from 1 July 2000.

iv.  Obtained housing loan from the following :

    Financial institutions cited under the Bank & Financial Institution Act (BAFIA) and loan from the Federal/State Government or other financial agencies; or

    Member's employer; or

    Licensed co-operative society/company.

v.  The house is mortgaged to the financial institution concerned; and

vi.  If members have refinanced their housing loan, the balance of loan to be considered is the balance of the first and the last housing loan from the financial institution, whichever is lower.

B.   JOINT PURCHASE WITH SPOUSE, FAMILY MEMBERS OR OTHER INDIVIDUALS

i.    Conditions as in A(i) to (vi) under Individual Purchase, and

ii.  The housing loan for the purpose of purchasing/constructing a house is made jointly with spouse, family member or other individuals

C.  TO ASSIST REDUCE/REDEEM THE HOUSING LOAN FOR SPOUSE

i.   Conditions as in A (i) to (vi) under Individual Purchase, and

ii.   The member and spouse are jointly registered in the Deed of Title of the property.

                     However, members are not eligible to apply if :

iii.   Members have obtained the housing loan for the purpose of renovation, to repair or make extension to an existing house; and

iv.   The house is mortgaged to acquire finance not for the purpose of purchasing/building the said house but for other purposes.


Amount Eligible For Withdrawal

Members can withdraw their savings as follows,
whichever is lower :

i.    Individual Purchase Or To Assist Reduce/Redeem The Housing Loan For Spouse

Current Outstanding Balance of Housing Loan
OR
The balance available in Account II.

ii.    Joint Withdrawal With Spouse, Family Members or Other Individuals

Current Outstanding Balance of Housing Loan
OR
The balance available in Account II for all applicants subject to
the outstanding balance of housing loan stated above.

For joint purchase, the EPF will firstly process application from the first purchaser and if the amount withdrawn by the first purchaser is insufficient, the EPF will then process application from the second purchaser and so forth.

EXAMPLE 1 (Individual Purchase)

Mr. R. Muthusamy purchased a house in 1996 costing RM75,000.00. He obtained a housing loan of RM67,500.00 from Bumiputra Commerce Bank Berhad. Based on the latest statement of housing loan balance, the outstanding balance is RM31,500.00. His savings in Account II is RM15,000.00. Withdrawal calculation for Mr. R. Muthusamy is :

Purchase Price of House

RM   75,000.00

Housing Loan

RM   67,500.00

Outstanding Balance of Housing Loan

RM   31,500.00

Savings in Account II of Mr. R. Muthusamy

RM   15,000.00

Amount Can Be Withdrawn

RM   15,000.00


EXAMPLE 2

(Joint Purchase With Spouse - Scenario 1)

Encik Zain and Puan Azizah have acquired a housing loan in 1997 amounting to RM140,000.00 for the purchase of a house costing RM180,000.00. This couple have withdrawn their savings under To Purchase/Build A House Withdrawal Scheme in the same year. Presently, their outstanding balance of loan is RM98,000.00. The EPF savings in Account II for Encik Zain is RM20,000.00 and for Puan Azizah is RM10,000.00. Withdrawal calculation for this couple is :

Purchase Price of House

RM  180,000.00

Housing Loan

RM  140,000.00

Outstanding Loan Balance

RM   98,000.00

Savings in Account II of Encik Zain

RM   20,000.00

Savings in Account II of Puan Azizah

RM   10,000.00

Total Amount Can Be Withdrawn

RM   30,000.00


(Joint Purchase With Spouse - Scenario 2)

Mr. Ranjit and Ms. Kavina have acquired a housing loan in 1996 amounting to RM63,000.00. They have
withdrawn their savings under To Purchase/Build A House Withdrawal Scheme in the same year. Presently, their outstanding balance of loan is RM46,000.00. The EPF savings in Account II for Mr. Ranjit is RM50,000.00 and for Ms. Kavina is RM20,000.00. Withdrawal calculation for this couple is :

Housing Loan

RM  63,000.00

Outstanding Loan Balance

RM  46,000.00

Savings in Account II of Mr. Ranjit

RM  50,000.00

Savings in Account II of Ms. Kavina

RM  20,000.00

Total Amount Can Be Withdrawn

RM  46,000.00


This withdrawal only accounts for the savings in Account II of Mr. Ranjit because his amount of savings in Account II is sufficient to cover their outstanding balance of housing loan.

EXAMPLE 3

(Withdrawal To Assist Reduce/Redeem The Housing Loan For Spouse - Scenario 1)

Encik Aziz and Puan Nora have purchased a house costing RM150,000.00 in 1995. Encik Aziz has acquired a housing loan amounting to RM135,000.00. His outstanding balance of loan is RM110,000.00. Puan Nora did not take a housing loan but her name is stated in the Deed of Title of the house. The EPF savings in Account II for Puan Nora is RM50,000.00. Withdrawal calculation for Puan Nora to assist her husband to reduce his housing loan is :

Purchase Price of House

RM 150,000.00

Housing Loan

RM 135,000.00

Outstanding Loan Balance of Encik Aziz

RM 110,000.00

Savings in Account II of Puan Nora

RM   50,000.00

Total Amount Can Be Withdrawn

RM   50,000.00


(Withdrawal To Reduce/Redeem Housing Loan Balance For Spouse - Scenario 2)

Mr. and Mrs. Lee have purchased a house costing RM250,000.00 in 1996. Mr. Lee has acquired a housing loan amounting to RM200,000.00 and his outstanding balance of loan is RM120,000.00. His EPF savings in
Account II is RM40,000.00. On the other hand, Mrs. Lee who did not apply for any housing loan but her name is stated in the Deed of Title of the house wish to assist his husband to reduce the outstanding balance of loan. Mrs. Lee's savings in Account II is RM180,000.00. Withdrawal calculation for Mrs. Lee is : 

Purchase Price of House

RM 250,000.00

Housing Loan

RM 200,000.00

Outstanding Loan Balance of Mr. Lee

RM 120,000.00

Savings in Account II of Mrs. Lee

RM 180,000.00

Total Amount Can Be Withdrawn

RM 120,000.00


EXAMPLE 4

(Withdrawal For Refinanced Housing Loan)

Encik Ali has purchased a house costing RM200,000.00 in 1995. He acquired a housing loan amounting to RM180,000.00 from Bank 'A'. In 1999, Encik Ali has refinanced his housing loan. The outstanding balance of loan with Bank 'A' is RM50,000.00 and he has refinanced the loan with Bank 'B' amounting to RM200,000.00
to redeem his loan in Bank 'A'. Now Encik Ali wishes to apply for withdrawal to reduce his outstanding loan of RM160,000.00. Encik Ali's savings in Account II is RM170,000.00. Withdrawal calculation for Encik Ali is :

Purchase Price of House

RM 200,000.00

Outstanding Balance of Loan in Bank 'A'

RM   50,000.00

Housing Loan Approved By Bank 'B'

RM 200,000.00

Outstanding Loan Balance in Bank 'B'

RM 160,000.00

Savings in Account II of Encik Ali

RM 170,000.00

Total Amount Can Be Withdrawn

RM   50,000.00


Frequency Of Application

Members can apply for this withdrawal once in every three years from the date of the last withdrawal made. Members must submit a new application every time they wish to withdraw their savings under this scheme.

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