Employee's Provident Fund, commonly known by the acronym EPF is a Malaysian government agency under the Ministry of Finance. It manages the compulsory savings and the retiring planning for private sector workers in Malaysia. Membership of the EPF is mandatory for Malaysian Citizens employed in public sectors, and voluntary for non-Malaysian Citizens. - WikipediaAs defined in Wikipedia, EPF is a savings and retirement planning which is compulsory for all Malaysian citizens who work in private sector. Every month, employees themselves as well as their employers will contribute certain amount to the EPF account from portion of their wages. All contribution will be divided into two accounts, 70% for Account I; 30% for Account II. Savings in Account I can be withdrawn when the member reaches age of 55 years old, is incapacitated, leaves the country or passes away. In the other hand, member is allowed to withdraw savings from Account II for downpayment or loan settlements for member's house, finances for education and medical expenses, investments, and when the member reaches age of 50 years old. In this article, guidelines of EPF withdraw to purchase house or to reduce/redeem housing loan will be discussed.
Member of EPF is permitted to withdraw savings from Account II to purchase residential property, or build residential property on a land and even settle the housing loan. Applicants are allowed to purchase second house given that the first house is sold or disposal of ownership of property. Definition of "disposal of ownership of property" as are below:
- Loss of ownership of the first house which is also owned through previous EPF withdrawal.
- Loss of ownership can be in terms of auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase.
- In summary, applicants is not allowed to purchase second house using EPF withdrawal if the first house which was owned through EPF withdrawal is still under applicants' name.
Applicants Eligibility
Applicants who wish to withdraw EPF must be:-
- Malaysian Citizen
- Malaysian Citizen who has made Leaving The Country Withdrawal before 1st August 1995 and has opted to re-contribute to EPF account.
- Non-Malaysian Citizen who has EPF account before 1st August 1998 or has PR status
- Before age of 55 years old
- Have at least RM500 in Account II
Criteria of Withdrawal
- Applicant has to buy or build residential house.
- Residential house which includes bungalow, terrace, semi-detached, apartment, condominium, studio apartment, service apartment, townhouse and shop with residential units.
- The method of purchasing house is through
- Cash purchase
- Housing loan
- Financial Institution which is licensed under Banking and Financial Institution Act 1989 (BAFIA)
- Central or state government or any other government financial agencies
- Member's employers
- Cooperatives or companies with license which is approved by Malaysian Cooperative, Ministry of Entrepreneur and Co-operative Development
- Licensed insurance companies which is approved by Central Bank
- Loan providers which is allowed by EPF
- Applicant has signed the Sales and Purchase Agreement for not more than three (3) years.
- Applicant has never owned a property by using EPF withdrawal.
- Applicant buys a house which has been acquired from a rental with a view of purchase agreement from a party authorised by EPF.
- Applicant bought a land and built a house on the same piece of land with dates of purchase and agreement to construct less than six (6) months.
- Applicant is not allowed to buy a land or house lot only without building house on the land.
- Applicant is not allowed to renovate, repair or additional work on existing house.
- Applicant is not allowed to purchase a property whereby the ownership of the said property is not via sale and purchase transaction.
- Applicant is not allowed to take overdraft loan.
- Applicant is not allowed to purchase third house.
- Applicant is not allowed to purchase house abroad or overseas.
Amount Eligibility
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Description
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Example
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Individual purchase with partially loan
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Amount = House price - loan amount + 10% of house price
or
All savings in
Account II
*Whichever is lower but not less than RM500.
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House
price: RM500,000
Loan
amount: RM450,000
Difference:
RM50,000
10%
of house price: RM50,000
Maximum
eligible amount: RM100,000
Savings
in Account II: RM200,000
Allowed
withdrawal amount: RM100,000
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Join purchase with partially loan
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Amount = House price - loan amount + 10% of house price
or
All savings in
Account II of each purchaser subject to the maximum amount eligible for
withdrawal
*Whichever is lower but not less than RM500
|
House price: RM500,000
Loan amount: RM450,000
Difference: RM50,000
10% of house price: RM50,000
Maximum eligible amount: RM100,000
Savings in Account II for purchaser A: RM200,000
Savings in Account II for purchaser B: RM20,500
Amount withdrawn by purchaser A: RM80,000
Amount withdrawn by purchaser B: RM20,000
Total withdrawn amount: RM100,000
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100% loan
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Amount = 10% of house price
or
All savings in
Account II
*Whichever is lower but not less than RM500
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House price: RM500,000
Loan amount: RM500,000
10% of house price: RM50,000
Maximum eligible amount: RM50,000
Savings in Account II: RM100,000
Allowed withdrawal amount: RM50,000
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Cash purchase
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Amount = House price + 10% of house price
or
All savings in
Account II
*Whichever is lower but not less than RM500
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House price: RM500,000
Loan amount: nil
10% of house price: RM50,000
Maximum eligible amount: RM550,000
Savings in Account II: RM300,000
Allowed withdrawal amount: RM300,000
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Main Documents
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·
KWSP 9C (AHL) Withdrawal Form
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IC
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Bank acount – to receive payment. Either bank
passbook, savings account statement, account holders details printed via
online, bank card
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Supporting
Documents
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Purchase from developer
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Sales and Purchase agreement which agreement
date less than 3 years
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Loan offer letter which dated less than 1 year
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For cash buyer: developer confirmation letter
that contains details of property
·
Proof of payment of more than 20% of house
price or Certificate of Fitness (CF) or Certificate of Occupation (CO)
·
For join purchase: proof of relationship (eg:
marriage certificate / birth certificate)
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Purchase of land & construction of house (package)
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Agreement letter for construction which is
dated less than 3 years and Sales and Purchase Agreement of land which
agreement date less than 6 months
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Loan offer letter which is dated less than 1
year
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Land title with seller’s/owner’s name
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Concent letter if the land is leasehold
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For cash buyer: developer’s confirmation
letter than contains details of property
·
Proof of payment of more than 20% of property
price or Certificate of Fitness (CF) or Certificate of Occupation (CO)
·
For join purchase: proof of relationship (eg:
marriage certificate / birth certificate)
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Subsales property (with title)
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Sales and Purchase Agreement which agreement
date less than 3 years
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If the pruchase is from family member: Transfer
of Ownership Form (Form KTN 14A / MOT)
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Title with seller’s/owner’s name, concent
letter from Land Office if is leasehold property or title with buyer’s name
with MOT
·
Loan offer letter which is dated less than 1
year
·
For cash buyer: confirmation letter from
lawyer’s office that handles the transaction
·
Proof of payment of more than 20% of property
price
·
For join purchase: proof of relationship (eg: marriage
certificate / birth certificate)
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Subsales property (without title)
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Sales and Purchase Agreement which agreement
date less than 3 years
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Concent letter from developer, Land Office (if
it is leasehold), or Deed of Assignment (DOA) between seller and purchaser
which is completed with stamp duty
·
Loan offer letter which is dated less than 1
year
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For cash buyer: confirmation letter from
lawyer’s office that handles the transaction
·
Proof of payment of more than 20% of property
price
·
For join purchase: proof of relationship (eg:
marriage certificate / birth certificate)
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Auction property
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Sales and Purchase Agreement or proclamation
of sale from administrator / court which the agreement date less than 3 years
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Loan offer letter which is dated less than 1
year; if more than 1 year, loan offer letter, Mortgage Form 16A, Deed of
Assignment (DOA) or title in buyer’s name
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For cash buyer: confirmation letter from
lawyer’s office that handles the transaction
·
Proof of payment of more than 20% of property
price
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Transfer of ownership documents: Form KTN 16F
(proclamation of sale from court) or Form KTN 16I (proclamation of sale from
administrator) or title in buyer’s name or Deed of Assignment AND letter of
confirmation from buyer’s/seller’s lawyer or any transfer of ownership form
(Form KTN 14A/16F/16I/DOA)
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Purchase of second property
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·
Proof of documents for second house purchased
subject to the withdrawal terms
·
Proof of sale or disposal of ownership of
first house
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Withdrawal EPF to reduce/redeem housing loan
Withdraw EPF to reduce or repay the balance of housing loan is similar as withdrawal EPF to purchase house, whereby applicants withdraw the savings from Account II. The main criteria for withdrawal EPF to reduce/redeem housing loan is, the applicant must be having housing loan with any financial institution, whereby:
- The institution is licensed under Banking and Financial Institution Act 1989 (BAFIA), Central/State Government or any other government agencies.
- Member's employers who has registered as EPF member.
- Cooperatives / companies with license which is approved by Malaysia Cooperative Commission, Ministry of Entrepreneur and Cooperative Development.
- Licensed insurance companies approved by Central Bank of Malaysia.
- Loan providers is allowed by EPF.
The applicants must have outstanding loan balance and the property must be charged as collateral for the housing loan. The application can be made once a year from the previous housing loan withdrawal.
Applicant is allowed to refinance the property as well whereby the considered loan balance refers to original housing loan balance with first loan financier or latest loan balance, which is lower. If loan involves more than one financier, the redemption letter will be compared against the latest balance to determine the amount eligible for this withdraw. Applicant is not eligible for withdrawal if original loan balance if fully settled.
Withdraw to redeem/reduce housing loan is subjected to the followings:
- Have never made any withdrawal to buy/build house before or
- Have made withdrawal to buy/build house, may only withdraw to reduce/redeem the loan balance for the same house only for individual/joint withdrawal/different house to assist spouse.
For withdrawal to assist spouse, spouse has to be:
- Purchased/built house with loan
- May be borrower/not borrower for housing loan
- Property has been charged as collateral for the housing loan
- Fully owned by spouse/jointly-owned by both applicant and spouse
- Provide proof of relationship (Nikah/marriage certificate/children's birth certificate)
- Withdraw to reduce/redeem housing loan of any house either for applicant him/herself/spouse subject to once a year withdrawal
Amount Eligibility
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Individual loan /
to assist spouse
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Jointly withdrawal
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·
Total housing loan balance or
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All savings in Account II
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·
Total housing loan balance or
·
All savings in Account II of each member
subject to housing loan balance
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Whichever lower but
not less than RM500
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Required Document
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Main Documents
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KWSP 9C (AHL) (DH) Withdrawal Form
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IC/Passport
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Housing loan balance statement according to
format by EPF or from Malaysian Treasury (Date within 3 months)
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For withdrawal more than once, all loan
redemption letters from previous financiers
·
Proof of relationship (For assisting spouse
case)
*if loan statement is incomplete, provide Sales And
Purchase Agreement, Mortgage Form and Title/Deed of Assignment
*if refinancing more than once, required to produce all
loan approval letters
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Supporting Documents
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Ownership of Transfer Form KTN 14A with new
owner name
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Deed of Assignment and letters from seller’s /
buyer’s lawyer which confirms that the Notice of Assignment has been produced
and received by the developer under Section 22D(2) Housing Developer Act
(control and licensing) Amendment 2007 (for property transactions after 12
April 2007)
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Deed of Assignment between applicant and new
owner
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Land title with new owner’s name and Sales and
Purchase Agreement between applicant and new owner
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RPGT Form 5 and Sales and Purchase Agreement
between applicant and new owner (sale before 1 April 2007)
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Confirmation of property sale by land
adminstrator (KTN 16I) / confirmation of property sale by court (KTN 16F)
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Confirmation property auction by bank
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Transfer of ownership by court order to any
party and divorce documents
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Formal search from Land Office with new owner’s
name and Sales and Purchase Agreement between applicant and new owner
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Confirmation letter from Authorities for
damaging on houses by natural disasters/abondoned housing project
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Deed of Revocation / Deed of Rescission for
purchase of first hosue / confirmation letter from developer/lawyer
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Confirmation letter on house damaged by fire
as a result of losing a house
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Modes of Payment
- All withdrawal payments will be credited directly to applicant's or spouse's loan account
- banker's cheque to housing loan financier if loan financier has not provide the mode of payment or loan made with EPF panel bank in NPL status
Submission Via
- EPF Counter
- bring along all related documents to be verified by EPF officer
- Verified photocopied documents can be accepted as well
- Ensure all related documents are verified by EPF officer, complete with signature, name, designation and official stamp
- Address to
THE EMPLOYEES PROVIDENT FUND
Locked Bag No. 220
Jalan Sultan
46720 Petaling Jaya
Selangor.