Still paying for an unfinished home in Malaysia? Here’s what Budget 2027 offers affected buyers

Photo is for illustration purposes only. Thousands of Malaysian homebuyers remain affected by abandoned housing projects, with some continuing to repay loans on properties they have yet to receive. — Picture by Sayuti Zainudin

By Soo Wern Jun

First Published: Thursday, 12 Nov 2026 7:00 AM MYT

KUALA LUMPUR, Nov 12 — Thousands of Malaysians who bought homes in abandoned housing projects are still waiting for answers, uncertain whether their properties will ever be completed or what they can do next.

For some, the financial burden continues, with housing loans to repay despite having no home to move into.

Budget 2027 proposes measures to ease some of these costs and encourage developers to revive abandoned housing projects.

But the assistance comes with conditions, and the government is not offering to settle buyers’ outstanding housing loans.

So what help is available, and what steps can affected purchasers take?

Here’s what you need to know.

What qualifies as an abandoned housing project?

A housing project may be classified as abandoned under several circumstances, including when construction has stopped for six consecutive months, the developer has been placed under receivership, a winding-up petition has been filed, or the developer admits it cannot continue with the development.

A project must also be formally declared abandoned by the minister under the Housing Development (Control and Licensing) Act 1966.

As of August 31, 2026, the Housing and Local Government Ministry (KPKT) had identified 262 abandoned private housing projects in Peninsular Malaysia.

Of these, 99 were licensed projects involving 28,289 housing units, while another 163 were unlicensed projects involving 10,605 units.

What assistance does Budget 2027 offer?

The government has proposed reinstating a full stamp duty exemption for transactions involving the rehabilitation of abandoned housing developments.

According to the Finance Ministry’s Budget 2027 Tax Measures, the exemption covers two groups: rescue contractors or developers brought in to rehabilitate abandoned housing projects, and original purchasers of properties in those developments.

The proposed exemption applies to eligible loan agreements and instruments of transfer executed between January 1, 2027, and December 31, 2030, subject to certification by KPKT.

For original purchasers, this means loan agreements for additional financing and property transfers connected to the rehabilitation process may qualify for full stamp duty relief.

For rescue developers and contractors, the exemption is intended to reduce transaction costs associated with taking over and financing abandoned developments.

The government previously offered a similar exemption for eligible transactions executed between January 1, 2013, and December 31, 2025.

Its proposed reinstatement is intended to encourage more rehabilitation efforts by reducing some of the costs involved in rescuing unfinished developments.

Will the government pay buyers’ outstanding loans?

No. The stamp duty exemption does not mean the government will settle the outstanding housing loans of affected purchasers.

Under KPKT’s existing guidance, buyers may still have to meet their housing loan repayment obligations under their financing agreements, even when their housing projects have been abandoned.

However, buyers whose projects have been officially declared abandoned can obtain a confirmation letter from KPKT to support applications for financial assistance.

According to the National Housing Department, the letter can help purchasers seek consideration for:

• Lower housing loan interest rates
• Restructuring of loan repayments
• A second Employees Provident Fund (EPF) withdrawal to purchase another home

For government employees with financing from the Public Sector Home Financing Board (LPPSA), the letter can also support applications to:

• Cancel an existing housing loan and apply for a new one
• Defer the 4 per cent interest charge during the project’s rehabilitation period or for five years, whichever comes first

These arrangements are subject to applications and approval by the respective institutions. They are not automatic entitlements.

How can buyers get official confirmation?

Buyers can check whether their housing development is officially listed as abandoned through KPKT’s housing information portal, Transforming and Empowering Data Usage in Housing (TEDUH).

If the project is listed, purchasers can apply for a confirmation letter from the National Housing Department.

The letter provides official confirmation of the project’s status and allows purchasers to approach their banks, EPF or LPPSA to seek the relevant assistance.

Applications can be submitted by email to [email protected], together with copies of the applicant’s identity card and sale and purchase agreement.

If the development is not listed, purchasers can seek clarification from the National Housing Department’s Private Housing Project Monitoring Division.

Buyers can also check the rehabilitation status of their developments through KPKT’s portal.

What if the developer cannot complete the project?

When a housing project is abandoned, buyers may face difficulties recovering the money they have already paid, particularly if the developer is insolvent or undergoing liquidation.

KPKT advises purchasers to submit claims against the developer by registered post or complete a Proof of Debt form obtainable from the Insolvency Department of Malaysia.

The ministry also stresses the importance of acting within the applicable limitation period.

Under the Limitation Act 1953, contractual claims are generally subject to a six-year limitation period, although when that period begins depends on when the cause of action arises.

KPKT’s published guidance refers to a six-year period from the date the sale and purchase agreement was signed.

Given the potential legal consequences of missing a deadline, affected purchasers should seek legal advice on the limitation period applicable to their claims.

How many projects have been revived?

According to figures released on October 19, KPKT said 1,726 troubled private housing projects involving 199,643 residential units, with a combined gross development value of RM158.16 billion, had been rehabilitated between 2023 and August 2026.

The figure covers both sick and abandoned developments.

Of the 1,726 troubled projects addressed between 2023 and August 2026:

• 1,542 sick projects involving 163,621 housing units were completed and obtained their Certificates of Completion and Compliance (CCC)
• 147 sick projects involving 29,900 units were restored to satisfactory progress
• 37 abandoned projects involving 6,122 units were rehabilitated through physical completion or other arrangements benefiting homebuyers

KPKT defines a sick housing project as one where construction progress is more than 30 per cent behind schedule, or where the completion period stipulated in the sale and purchase agreement (SPA) has expired.

However, a sick project is not automatically classified as abandoned.

Can Malaysia end abandoned housing projects by 2030?

The government has set a target of eliminating sick and abandoned private housing projects by 2030.

To achieve this, KPKT established the Task Force for Sick and Abandoned Private Housing Projects (TFST) in 2023 to coordinate rehabilitation efforts involving developers, financial institutions, purchasers and other relevant parties.

The task force monitors troubled developments and facilitates recovery measures.

The ministry is also strengthening oversight through measures including the Housing Integrated Management System (HIMS), TEDUH and periodic audits of Housing Development Accounts.

These initiatives are intended to identify troubled developments earlier and prevent more buyers from being left with unfinished homes.