Housing Loan Interest Tax Relief Malaysia 2026 — New Budget 2025 Relief, RM 7,000 or RM 5,000, First-Time Buyer (YA 2025)
New housing loan interest tax relief introduced in Malaysia's Budget 2025: first-time homebuyers who signed SPA between 2025–2027 can claim RM 7,000/year (property ≤RM 500K) or RM 5,000/year (RM 500K–RM 750K) for 3 consecutive years. Who qualifies, how to claim in e-Filing, and how much tax you save.
What Is the Housing Loan Interest Relief? (New for YA 2025)
Malaysia's Budget 2025 introduced a brand-new housing loan interest tax relief for first-time homebuyers. Unlike previous one-off COVID-era schemes, this is a structured 3-year relief for anyone who signs their Sale and Purchase Agreement (SPA) between 1 January 2025 and 31 December 2027.
The relief works simply: deduct the interest (or Islamic profit rate) you pay on your housing loan from your chargeable income, up to a cap that depends on your property price.
Properties above RM 750,000 do not qualify. The relief applies to both conventional bank interest and Islamic home financing profit rates (Murabahah-i, BBA). Only one person per property can claim.
Relief Tiers by Property Price
| Property SPA Price | Annual Relief Cap | Duration | Total Deduction (3 years) |
|---|---|---|---|
| RM 500,000 and below | RM 7,000 / year | 3 years | RM 21,000 |
| RM 500,001 – RM 750,000 | RM 5,000 / year | 3 years | RM 15,000 |
| Above RM 750,000 | Not eligible | — | — |
The cap is RM 7,000 or RM 5,000 per year — or your actual interest paid (whichever is lower). Most first-year borrowers will have paid more than RM 7,000 in interest, so the cap is the binding limit.
How Much Tax Do You Save?
Tax savings depend on your income tax bracket. Here's the annual saving from claiming the housing loan interest relief:
| Tax Bracket | Saving with RM 7,000 relief | Saving with RM 5,000 relief |
|---|---|---|
| 13% (RM 50,001–100,000) | RM 910 | RM 650 |
| 21% (RM 100,001–250,000) | RM 1,470 | RM 1,050 |
| 24% (RM 250,001–400,000) | RM 1,680 | RM 1,200 |
| 25% (RM 400,001–600,000) | RM 1,750 | RM 1,250 |
Multiply by 3 to get your total savings over the relief period: a buyer in the 24% bracket with a RM 500K home saves RM 5,040 in tax over 3 years — just from this one relief.
Track All 3 Years of Your Housing Relief — Malaysia Tax Planner 2026
The Tax Planner's Relief Tracker tab has a dedicated housing loan interest row. Enter your annual interest certificate amount once — the tracker calculates your savings and reminds you for YA 2026 and YA 2027 automatically. Includes all 24 reliefs, PCB calculator, and joint vs separate assessment comparison.
Download Malaysia Tax Planner 2026 — RM 42Which Year of 3 Am I In? (By SPA Signing Date)
The 3-year clock starts from the year your SPA was signed — not the year the property is completed, not the year the loan is disbursed. Here's when you can claim:
| SPA Signed | Year 1 | Year 2 | Year 3 | Note |
|---|---|---|---|---|
| Jan–Dec 2025 | YA 2025 ✅ | YA 2026 | YA 2027 | Year 1 — claim now (before 30 Apr) |
| Jan–Dec 2026 | YA 2026 | YA 2027 | YA 2028 | Can't claim YA 2025 yet |
| Jan–Dec 2027 | YA 2027 | YA 2028 | YA 2029 | Last qualifying SPA year |
| 2024 or earlier | — | — | — | NOT eligible for this relief |
Quick Eligibility Check
| Scenario | Eligible? |
|---|---|
| First-time homebuyer (never owned residential property before) | ✅ Eligible |
| SPA signed between 1 Jan 2025 and 31 Dec 2027 | ✅ Eligible |
| Residential property (house, condo, apartment, townhouse) | ✅ Eligible |
| Islamic home financing (Murabahah-i, BBA) | ✅ Eligible |
| Property price ≤ RM 500,000 (RM 7,000 cap) | ✅ Eligible |
| Property price RM 500,001 – RM 750,000 (RM 5,000 cap) | ✅ Eligible (lower cap) |
| SPA signed in 2024 or earlier | ❌ Not eligible |
| Property price above RM 750,000 | ❌ Not eligible |
| Commercial property / SOHO / shop-office | ❌ Not eligible |
| You already owned residential property before this purchase | ❌ Not eligible |
How to Claim in e-Filing Form BE (YA 2025) — Step by Step
- Get your bank's annual interest certificate. Log in to your bank's online banking portal or visit the branch. Request the "Annual Home Loan Interest Certificate" or "Statement of Home Financing Interest/Profit Rate" for 2025. The document shows the total interest (or profit rate) paid in calendar year 2025.
- Confirm your SPA date. Check your SPA document — the signing date must be between 1 January 2025 and 31 December 2027. If signed before January 1, 2025, you are not eligible.
- Confirm your property price. Look at the SPA price (not loan amount, not current valuation). This determines your relief cap: RM 500,000 and below = RM 7,000; RM 500,001 to RM 750,000 = RM 5,000.
- Log in to MyTax at mytax.hasil.gov.my. Select e-Borang → BE (for salaried employees) or B (for self-employed). Go to Part F — Relief / Pengurangan.
- Enter the housing loan interest amount. Find the housing loan interest field (new for YA 2025). Enter the LOWER of: (a) actual interest from your bank certificate, or (b) your applicable cap (RM 7,000 or RM 5,000). The system will cap the entry automatically if you enter more.
- Keep all documents for 7 years. Do NOT upload anything during filing — but retain your interest certificate, SPA, and bank loan agreement in case of LHDN audit. Missing documents = disallowed relief + potential penalty.
Under-Construction Property — Can You Claim?
If your property is still under construction in 2025, you may still have started making progress payment interest (charged by the bank during the construction period before full loan drawdown). This interest qualifies for the relief — as long as:
- Your SPA was signed in 2025
- Your property is residential (not commercial)
- The property price in your SPA is RM 750,000 or below
The key date is the SPA date, not the Certificate of Completion and Compliance (CCC) date. A buyer who signed SPA in March 2025 but whose property won't complete until 2027 can still claim the interest paid during 2025 construction in YA 2025.
Joint Housing Loan — Who Claims?
For a joint housing loan (two names on the loan), only one borrower can claim the full relief per year. Both borrowers cannot each claim RM 7,000 on the same loan — the total relief per property is capped at RM 7,000 (or RM 5,000) regardless of how many borrowers are on the loan.
Strategy: The higher-income borrower should claim the relief, as they are in a higher tax bracket and save more per RM 7,000 of deduction. If your combined income means one of you is in the 25% bracket and the other is in the 13% bracket, the 25%-bracket borrower saves RM 1,750/year vs RM 910/year for the same RM 7,000 relief.
Exception: If you are filing jointly (bersama) with your spouse, the relief applies to the household return. If filing separately (berasingan), designate one borrower as the claimant and ensure the other does not also claim it.
Islamic Home Financing — Murabahah-i, BBA, and Takaful
All Shariah-compliant home financing products — Murabahah-i, BBA (Bai' Bithaman Ajil), Musharakah Mutanaqisah — qualify for this relief on the same terms as conventional housing loans. The "profit rate" you pay under Islamic financing is treated identically to "interest" under the tax relief rules.
To claim: request an annual profit rate certificate or hibah/profit statement from your Islamic bank (CIMB Islamic, Maybank Islamic, Bank Islam, Public Islamic, RHB Islamic, Hong Leong Islamic). This certificate is the Islamic equivalent of the interest certificate used by conventional borrowers.
Malaysia Tax Planner 2026 — Track All 3 Years Automatically
The Tax Planner's Relief Tracker tab includes housing loan interest (new Budget 2025), all 24 standard reliefs, PCB monthly calculator, and joint vs separate comparison. Buy once, use for YA 2025, 2026, and 2027 — covering all 3 years of your housing interest relief.
Download Malaysia Tax Planner 2026 — RM 42Still Shopping for a Home Loan? Compare Rates First.
The relief covers the interest you pay — so a lower interest rate = less interest paid = lower actual cost (even though the relief cap stays the same). Compare Malaysia's best home loan rates before signing your SPA.
Compare Malaysia Home Loan Rates — Free via RinggitPlus