A new rent-to-own, or RTO, scheme will be introduced to offer a more flexible and affordable rental system. This initiative, part of broader housing reforms under the government’s plan to deliver one million affordable homes over a 10-year period within the 13th Malaysia Plan (13MP) Or Rancangan Malaysia Ke-13 (RMK13), aims to enhance home ownership opportunities for the rakyat.

Expanding Access to Property

The upcoming RTO scheme is specifically tailored to assist households that currently lack upfront deposits or do not qualify for conventional commercial financing. The 13MP report stated that this RTO home ownership method will be expanded to provide more opportunities for such households, opening doors for additional families to secure a home.

A Consortium Approach to Housing

To ensure the RTO scheme operates efficiently and sustainably, the government will also explore the establishment of a dedicated housing consortium. This body would be responsible for the comprehensive management of the programme, providing a structured approach to its implementation and long-term viability.

Islamic Financing Principles

The RTO initiative offers an alternative home financing method based on the Islamic concept of ijarah (lease). This allows consumers to rent a property with the option to purchase it at a later stage. This model was initially introduced under Budget 2020 for a nationwide, government-backed scheme to support those unable to afford the standard 10% deposit required for home purchases. The government previously worked in collaboration with financial institutions to facilitate RTO schemes for properties priced up to RM500,000.

Improving Existing Schemes and Future Provisions

In addition to the new RTO programme, the government plans to improve existing affordable housing financing schemes. This will involve refining elements such as phased interest rate structures and extended financing tenures. These adjustments are designed to enable more individuals, particularly first-time buyers, to own homes. The RMK13 report also noted that to prepare for an ageing population, long-term financing or rental schemes for senior citizens will be introduced.

Protecting Tenants and Homeowners

To ensure fair protection for both tenants and property owners, a Residential Tenancy Act will be enacted. This new legislation is currently planned and is not yet in force. It aims to establish clear guidelines and rights within the rental market, fostering a more equitable environment for all parties involved.

Stay tuned for more coverage as we continue to explore how the 13th Malaysia Plan will influence policies, prices, and your personal finances in the years to come.

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• TAGS:
• 13MP
• RENT-TO-OWN SCHEME
• RMK13
• RTO