Hi all.
Recently my house was seriously damaged by roof leaks, so we decided to renovate.

It's going to look like this: Parents pay off the current mortgage with KWSP (150k), I'll take over ownership of house A and refinance for renovations.

So here's the thing:
a) What do you think about this method? Refinancing is the only way, or we won't have enough cash for renovation.

b) I'm considering refinancing (let's say I'm eligible for a refinance of up to 500k), renovation out 300k, then using the balance 200k to buy another house B (or keeping the 200k and getting a new loan for B since I think house B is priced lower than the market rate, so I think it's a good investment).

(b) What type of property you want to buy for 200k ? You cant get further loan for the 2nd property because your max is 500k and you oredi used up that amount.

In my opinion, only 2 things to consider:

1) What is the loan margin that you can get for house B? If very low, then you have no choice but to put the 200k into house B.
2) If can get 90% loan, then what are you going to invest your 200k in? Shares, Crypto, Fixed Deposit? If you confident in getting good return from the investment, then go ahead and take 90% loan.

A low-cost one-storey house. I'm thinking of buying and renting it out or having some light renovations done and selling it.

If I apply for a new loan for this house B, I will receive a penalty from payoff within the lock-in period. Therefore, thinking about whether it is better to use funds from house A to purchase house B.

1) Assume I buy it for 140k and spend 20k on renovations, and then I sell it for 180k.
2) I'm not sure whether a refinance can get up to 90%. I am unfamiliar with other investing options, but I will learn. In the meantime, here is what I think.

1) If only can earn 20k gross, not really worth your effort. Do consider legal fees (both buying and selling), stamp duty, agent commission, real property gain tax, quit rent and assessment while you are holding the property etc. Your net gain will be a lot lower than 20k.

2) Normally can refinance up to 80% of market value. Have to bear the valuer cost for this.

I appreciate your advice. I will think about it again.

You wont be able to qualify for a low cost property once you are a registered property owner. I have guessed that was your intention for a 200k property.

However, if you buy b4 taking over parents property and on the assumption your income does not exceed the thresshold requirement, then you borrow 200k first and later 300k after the transfer.

Bear in mind bank loan you money based on your income and not the number of properties.

If your income can qualify for 500k as mentioned, that is the max you get no matter how many properties you buy within the time period UNLESS your income increases overtime.

This post has been edited by mini orchard: Mar 1 2022, 08:49 AM

What you mean is if I make more than a low-cost owner, the bank might not approve my loan?

I have a car loan (100k) and PTPTN now only.

Govt policy ..... low cost housing is meant for low income earner.

If example, the cut off is 5k, and you earn 5.1k .... means cannot buy.

Is not bank cannot approve loan, govt dont allow the purchase

This post has been edited by mini orchard: Mar 1 2022, 11:11 AM

How about if cash buy?

Cannot also.

Govt dont allow transfer to your name.

Understand. What's the maximum salary to buy a low-cost house? When I asked the agent, she said I could still buy, maybe just the loan amount isn't much (she sold a lot of low-cost houses, and that's what she knows).

Depending on state govt and projects.

I cant say off hand.

Older units could be very low because that time low cost less than 30k.

Now because of inflation and under Rumah WIP or RSKU is higher. You can google.

But then again, one of the condition of purchase is CANNOT RENT OUT and govt has the right to take back the property if tnc are not followed.

The agent is not wrong either. Maybe her purchasers qualified.

You can sign SnP, but approval rejected then seller refund. But dont take risk. If seller spend your money jor, how to pay you back ?

This post has been edited by mini orchard: Mar 1 2022, 12:01 PM

When I went to the unit yesterday and checked, the agent said the last price was $100,000. I am considering putting a deposit down.

Another concern is this.

Is it possible to buy, renovate, and sell it within two months? Some of my friends said I might be liable for RPGT

All purchase of a govt housing is subject to state approval. From SnP signing date to vacant possession can be around 6 months.

RPGT is 30% of nett profit below 3 years of ownership.

And how much you intend to sell after reno ?

It's not government housing.

My planning is to spend 30k for renovation and sell for 160k (I checked housing in the same area, MV about 160k for a basic unit)

According to what you said, does that mean that I cannot sell right away (I have to wait at least three years) so I don't have to pay RPGT?

You paying caah for the property ?

You are allowed to deduct cost of purchase, reno and 10k rebate b4 lhdn tax on the balance figure

Does that mean I will have to pay RPGT on any properties I buy and resell within three years?

5 years

6th year onwards, no rpgt.

This post has been edited by mini orchard: Mar 14 2022, 03:52 PM