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Tuesday, October 4, 2016

More may be withdrawn from EPF for first house purchase

PETALING JAYA - Malaysians may be allowed to withdraw more money from their Employees Provident Fund (EPF) account when they purchase their first home, Finance Minister II Johari Abdul Ghani said today.

Clarifying that such a move would be allowed only for those who are first-time buyers and for the purchase of affordable homes, Johari said that Putrajaya is currently studying the possibility, The Edge Markets reported today.

“It is a good suggestion and so, we are in discussion with EPF,” he said, according to the business portal.

Johari added that it could allow EPF members to tap onto their savings for their first home, but no decision has been made as yet.

“We want to help first-time home buyers to bridge the gap between the loan and the house prices,” he was quoted as saying by The Edge.

According to the EPF website, a member can only withdraw funds from the Account 2 portion of their total EPF savings.

Currently, the amount that a member can withdraw is “the difference between the house price and the loan amount, plus an additional 10% of the house price; OR all the savings in Account 2; whichever is lower”.

Johari said that the discussions with the EPF also looked at the possibility that any resale of the house would require part of the withdrawal amount to be returned to the same member’s EPF account.

“Should the house buyer sell the house later, part of the proceeds have to be returned to their EPF account (based on the extra quantum they withdrew),” The Edge quoted him as saying.

Meanwhile, asked about the upcoming Budget 2017, Johari said that operating expenses, including civil servants’ emoluments and pensions, would continue to make up the biggest chunk of the country’s spending category.

“In fact, the expenses will grow each year. Hence, we need to improve it by boosting their productivity,” he said, according to The Edge.

Saying that there will be more focus on people-centric programmes, including the construction of schools and hospitals, Johari did state however, that mega infrastructure projects will go on as scheduled due to the “multiplier effect it brings to the country’s economy”.

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