Can You Use Your EPF to Buy a House? How Much You Can Withdraw in Malaysia

Yes. EPF (the Employees Provident Fund, or KWSP) lets you take money out of Akaun Sejahtera (it used to be Account 2) to help pay for a home. With a loan, you can take out the purchase cost minus your approved loan, plus 10% of the purchase cost, or all your Akaun Sejahtera savings, whichever is lower.

Which account the money comes from

Since 11 May 2024, EPF savings sit in three accounts:

• Akaun Persaraan (it used to be Account 1).
• Akaun Sejahtera (it used to be Account 2). This is the one for housing. EPF’s examples of its uses are housing, education, health, insurance or takaful (Islamic insurance) protection, Hajj and age 50.
• Akaun Fleksibel (the new third account).

Each new contribution is split 75% into Akaun Persaraan, 15% into Akaun Sejahtera and 10% into Akaun Fleksibel. So only 15% of each new contribution lands in the housing account.

Akaun Fleksibel is separate from the housing withdrawal. The housing withdrawal sum counts Akaun Sejahtera only.

EPF also lets you move savings from Akaun Fleksibel into Akaun Sejahtera, one way only, with no limit on the amount. We found no EPF text on using such a move to raise a housing withdrawal.

Who can apply

For the Buy House Withdrawal on a unit bought from a developer, EPF’s rules are:

• Malaysians and non-Malaysians can apply.
• You must be below 55 years of age.
• You need at least RM500 in Akaun Sejahtera.
• You must be buying a residential house.
• You need an approved loan from a lender EPF recognises, or you pay with your own money.
• You have never made a housing withdrawal, or you made one before but have sold or disposed of that property.

EPF’s list of homes that count is: “bungalow/terrace/semi-detached/apartment/condominium/studio apartment/service apartment/townhouse/Small Office Home Office (SOHO) or a shop lot with a residential unit from a developer in Malaysia.”

If you buy a SOHO, EPF says you must apply by hand at an EPF office. We found no EPF text on whether the land title type, commercial or residential, makes a difference (our title guide explains the two). Ask EPF before you count on the money.

How much you can take out

EPF’s formula, when you buy with a housing loan, is:

Lower of: (purchase cost − approved loan) + 10% of purchase cost, OR all your Akaun Sejahtera savings

EPF’s page does not define “purchase cost” further. In our example we take it as the price in the SPA (sale and purchase agreement).

If you pay with your own money and take no loan, the formula is the purchase cost plus 10%, or all your Akaun Sejahtera savings, whichever is lower.

The loan figure is the amount your bank approves. Our DSR guide explains how banks decide how much to lend.

Buying with your spouse or family

EPF has two kinds of withdrawal: on your own, or joint with your spouse or a family member. In a joint withdrawal, each person’s sum is capped by their own Akaun Sejahtera savings. For a joint withdrawal you need a marriage certificate or birth certificate to prove the relationship.

A second house

EPF helps with up to two homes. If you already used EPF savings to buy your first home, you must sell or dispose of it before you apply to withdraw for the second.

The papers you need

• Form KWSP 9C (AHL) and its checklist.
• Your SPA. It must be not more than 3 years old on the date you apply. Our SPA guide explains the SPA.
• If you take a loan, your housing loan approval letter. If the approval is more than one year old, you also need the loan agreement, Form 16A, or the title deed in your name given to the bank as security.
• If you pay with your own money, a letter from the lawyer’s office handling the sale. It must give the property details and say the purchase was made by cash.
• Your bank passbook or a copy of your bank statement.
• Non-MyKad holders also give a copy of their identity papers, with the original for checking.

EPF rejects a withdrawal application if the thumbprint check (CIJ) is not done at an EPF office within 14 working days.

EPF’s page says the full payment is credited in ringgit to your account, if it is an active account with one of EPF’s panel banks (banks EPF pays into) and your identity number matches the bank’s records. If that fails, EPF issues a banker’s cheque.

After you buy: two more ways to use EPF

You can also take money from Akaun Sejahtera to pay down your own home loan, or help your spouse with theirs. You can take the loan balance or all your Akaun Sejahtera savings, whichever is lower, with a minimum of RM500. This is allowed once a year.

EPF also has a Housing Loan Monthly Instalment Withdrawal. It needs at least RM600 in Akaun Sejahtera and is limited to one house per member.

What to check before you buy

• How much is in your Akaun Sejahtera today? The cap is that balance, not your total EPF.
• Is your SPA no more than 3 years old on the day you apply?
• Is the unit on EPF’s list of homes that count? If it is a SOHO, plan to apply at an EPF office.
• If the unit is on commercial title, ask EPF whether it counts before you rely on the money.
• Did you use EPF for a home before? If so, has that home been sold or disposed of?
• If you take a loan, do you have the loan approval letter? If it is more than a year old, do you have the extra loan papers too?

This is a general guide, not legal or financial advice, and EPF rules can change. Check your own case with EPF before you sign.