Withdrawing EPF To Buy Homes
Recently one of my readers asked about withdrawing EPF savings to buy an apartment. So after some searching, here are some easy pointers for everyone planning that same path.
Basically there are 3 accounts in our EPF savings - Account 1 - Savings for Retirement (60%) Account 2 - Savings for Housing (30%) Account 3 - Savings for Medical (10%). Account two can be withdrawn entirely for buying houses – both privately built houses or for government housing.
Anyone with an EPF can withdraw. However, only those who have worked many years would have a substantial amount to be withdrawn. Also bear in mind, this sum is only for down-payment of your house, NOT for interim installments.
Below is a very useful Frequently Asked Questions (FAQ) taken from the EPF official site:
If I have bought a house using my EPF savings, can I withdraw my savings again to purchase a new house?
You are eligible to apply under Housing Withdrawal Scheme to purchase a second house on condition that you have sold the house that you have bought earlier with your EPF savings.
Can I withdraw my EPF savings to purchase a house paid in cash?
Yes, you can. You are required to submit the payment receipt made to the developer/vendor of not less than 20% from the purchase price of the house. The amount that you can withdraw is the purchase price of the house plus 10% of the purchase price or all your savings in Account II, whichever is lower.
Do I need to wait until 5 years as an EPF member before I can apply for withdrawal to purchase a house?
No, there is no waiting period for this scheme. You can apply for the withdrawal if you have savings in Account II.
I purchased a house jointly with several persons. Can we withdraw our EPF savings?
Yes, on condition that all the persons names are stated in the Sales and Purchase Agreement, which will then be included in the Deed Of Title. This is solely to protect the members’ interest.
Can I withdraw my EPF savings to purchase a piece of land?
You cannot withdraw your EPF savings to purchase a piece of land. However, you can withdraw your savings to purchase a land and build a house on it simultaneously.
If I build a house on a land owned by my spouse, can I make withdrawal to reduce/settle the housing loan balance?
Yes, subject to the condition that you are the borrower of the loan taken from the financial institution to finance the house.
Can I withdraw my savings to build a house on a land that is not in my name?
No, except to build a house on a land owned by your spouse.
(If you have any questions or viewpoints, feel free to leave them in the ‘comments’. All are welcome!)
Hi,
wanna ask;
1) your opinion on buying house from auction
2) buying fully developed house vs in development house
3) buying 2nd hand home
tq
Comment by Muhammad Imran Suid — July 28, 2005 @ 7:58 am
Muhammad Imran, wow, good questions. some of it i’ve replied in my post today (”Methods of buying Houses in Malaysia”).
Q1
Buying from an auction, you really need to check the background of the house, the seller and any legal cases pertaining the the house. And usually it takes a lot of work and a lot more luck & timing. Unless you’ve the inclination to it, it might be frustrating for some.
Q2
Buying a completed house is pretty much the same as a house in development. Except you have to put the payment up front. So you usually have to arrange a bank loan within the grace period (usually 30 days). In terms of house price, a completed house is usually more expensive, but as a trade-off you are not servicing the banks loan during construction.
Q3
2nd hand homes depend on a lot of factors - location, condition of house, price and all that. but if you like the house and all the other factors are acceptable, why not?
Comment by Administrator — July 29, 2005 @ 2:41 am
Hey Simon, this is really useful leh! Thanks so much!
Am gonna buy my apartment end of the year.
Comment by anjali* — July 29, 2005 @ 12:09 pm
no problem, nice to see you here!
Comment by Administrator — July 30, 2005 @ 4:36 am
Hi,
U can withdraw the EPF 2nd a/c 2 reduce your housing loan, not necessary for down payment only. I myself has managed to withdraw twice to reduce my housing loan, in year 2001 and 2005.
Comment by Bernard — August 2, 2005 @ 4:09 am
bernard,
you’re right, thanks for the tip. Acc2 CAN be used to reduce loan sum, but NOT for monthly payment.
Comment by Administrator — August 2, 2005 @ 7:06 am
is the money withdrawed from EPF only for downpayment?how about others fees that need to pay when buying a house.for example legal fees and transfering fees.
Comment by chong — August 6, 2005 @ 7:25 am
chong,
yes, it is possible, if its the withdrawal for the first payment. The money will be deposited in your bank acc.
Comment by Administrator — August 8, 2005 @ 8:48 am
If i don’t have enough money at acct. 2nd to cover my down payment n legal fees, can i oso use my 1st account or 3rd for the purpose of it?
Comment by Def — October 3, 2005 @ 6:30 pm
No. Acct 1 & 3 are for different uses.
Comment by Administrator — October 4, 2005 @ 12:31 am
Thxs admin.
Comment by Def — October 4, 2005 @ 3:11 pm
I am a singaporean, how or where can I withdrawn my epf as i am 58 yrs now
pls advice
thanks
Comment by ho yip kheong — March 16, 2007 @ 2:12 pm