Trinity Group Urges Bold Housing Reforms in Budget 2026 to Strengthen Affordability

By Dato’ Neoh Soo Keat

As Malaysia prepares for Budget 2026, set to be tabled in Parliament on 10 October 2025, the nation faces pressing challenges in the property sector that require urgent and decisive attention. Rising construction costs, regulatory hurdles, and labour shortages are placing significant pressure on both developers and homebuyers, threatening the resilience and affordability of the housing market.

At Trinity Group, we commend the government’s continued focus on affordable homeownership and sustainable urban development. These are critical priorities for ensuring that Malaysians from all walks of life can access quality homes in thriving communities. However, to meet these goals, Budget 2026 must go further and introduce bold, targeted reforms that address the structural challenges currently hindering the property market.

Stimulating Homeownership with Incentives

One immediate step is the reintroduction of the Home Ownership Campaign with 100 percent stamp duty exemptions on the Memorandum of Transfer and loan agreements for properties priced up to RM1 million. Coupled with 100 percent financing options for first-time buyers, this will empower more Malaysians to fulfil their homeownership dreams while injecting much-needed momentum into the property sector.

In addition, the minimum purchase price threshold for foreign buyers of strata properties in Selangor should be revised from RM2 million to RM1 million, in line with Kuala Lumpur’s policy. Given that both states share similar urban characteristics and market dynamics, aligning these thresholds would strengthen Selangor’s competitiveness, attract more foreign investment, and stimulate greater economic activity within the state’s property market.

Enhancing Loan Accessibility

Equally important is improving loan accessibility. Revising the debt service ratio calculations from “net” to “gross” income and removing the 70 percent loan-to-value cap for third or subsequent housing loans will provide greater financial flexibility. These adjustments will help aspiring homeowners navigate financing options in a way that reflects real-world earning capacities.

Furthermore, banks should be allowed to consider informal income when assessing loan applications. Many Malaysians earn through informal channels, yet their incomes are excluded, which reduces their housing loan eligibility. By recognising these earnings, financial institutions can expand access to credit and enable more Malaysians to enter the property market.

Driving Affordability and Industry Support

Affordability can also be enhanced by reducing premiums on land conversions and development charges. This measure will lower overall costs for developers and translate into more affordable housing options, especially for lower-income groups and first-time buyers who are most vulnerable in today’s market.

To combat labour shortages that drive up construction costs, we recommend expediting approvals for foreign labour intake in the construction sector. Stabilising the workforce will help contain escalating costs and ensure timely project delivery.

Furthermore, targeted tax incentives on essential building materials will help mitigate the impact of rising input costs. This is a practical step to keep housing prices within reach for ordinary Malaysians.

A Vision for a Resilient and Inclusive Property Market

Budget 2026 offers an opportunity to recalibrate and strengthen Malaysia’s property market with policies that promote resilience, affordability, and inclusiveness. Trinity Group stands ready to work alongside the government and industry partners to realise these reforms.

Together, we can reimagine urban living and deliver innovative, accessible homes that meet the evolving needs of Malaysian communities.

In doing so, we can help ensure that every Malaysian family has the opportunity to live in a quality home, an essential foundation for building vibrant and sustainable communities nationwide.

To support this vision, it is equally important to address structural challenges within the development ecosystem. The government should consider measures to reduce upfront utility connection costs, while streamlining contributions and premiums to utility companies. At the same time, maintaining consistency in land premium structures will help reduce the financial burden on developers.

In parallel, more efficient and transparent approval mechanisms should be introduced to minimise red tape, enabling projects to progress more swiftly and ensuring that supply keeps pace with demand.

Dato’ Neoh Soo Keat is the Founder and Managing Director of the Trinity Group

Business News

Bold Housing Reforms