The short answer
On a new project still being built, you pay in stages, not all at once.
- At the SPA: 10% of the price, less any booking fee.
- During construction: the developer bills a percentage each time a stage of work is finished and certified by the architect or engineer. With a loan, the bank pays these bills directly.
- At handover and after: the last portions, with part held back by the developer's lawyer as stakeholder.
The forms are fixed by law: Schedule G for landed homes, Schedule H for strata homes. Because the bank releases the loan bit by bit, your interest starts small and grows as the building rises. Try the instalments in the loan calculator. Want me to work it out for your own case? WhatsApp +60 17-279 8932.
Why progressive payment exists
Under the Housing Development (Control and Licensing) Act 1966, a developer selling homes that are not yet built must use the statutory sale and purchase agreement set by the Regulations. These forms include a payment schedule tied to building progress. The idea is simple: you pay for work as it is done, not for promises.
| Form | Used for | Examples |
|---|---|---|
| Schedule G | A house sold together with its land | Terrace, semi-detached, bungalow |
| Schedule H | A strata unit in a subdivided building | Condominium, serviced residence, apartment |
Because the form is prescribed by the Regulations, its key terms are set rather than negotiated. Your lawyer can show you the payment schedule in your own SPA.
The stages in plain words
The exact list and percentages are in the payment schedule of your SPA. In broad terms the money follows the building:
- Signing the SPA. The first 10%.
- Below ground. Foundation and footing works.
- The frame. The structural frame and floor slabs rise.
- Walls, doors and windows. The building closes in.
- Roof and services. The roof goes on; wiring, plumbing and internal finishes follow.
- External works. Roads, drains and connections to water, sewerage and electricity.
- Vacant possession. Keys are handed over with water and electricity ready for connection.
- After handover. The last portion, part of which is held by the developer's lawyer as stakeholder during the defect liability period.
A strata schedule has more stages than a landed one, because a tall building takes more steps.
What the developer must show before billing
The National Housing Department states two rules that protect you:
- No SPA, no payment. A developer cannot collect any payment without a signed SPA.
- No certificate, no bill. A developer cannot accept an instalment that is not backed by a certificate from the project's architect or engineer confirming the stage is done.
When a bill arrives, it should come with the certificate for that stage. If you have a loan, send it to your bank quickly so the bank can pay on time.
How the loan and the interest work
With a loan, the bank pays each stage bill straight to the developer once your own share has been paid. You start paying interest only on what has been released.
Generic example. A RM 500,000 home, 90% loan of RM 450,000, assumed rate 4.2% a year. Figures are rounded and for illustration only.
| Amount released so far | Monthly interest (about) |
|---|---|
| RM 50,000 | RM 175 |
| RM 150,000 | RM 525 |
| RM 300,000 | RM 1,050 |
| RM 450,000 (fully released) | Full instalment of about RM 2,201 |
So in the early stages your monthly payment is small. It rises as the building goes up, and the full instalment usually starts once the whole loan is released, often around handover. Plan your cash flow for that step up.
If you are also paying rent while you wait, add the two together when you budget. A rise in the OPR during construction raises the interest on released sums too; see the OPR guide.
Deadlines that protect you
From the National Housing Department's guidance on the statutory forms:
| Rule | What it says |
|---|---|
| Late payment by you | Interest of 10% a year on an instalment unpaid more than 21 working days after written notice; the SPA can be terminated if the default continues more than 28 days |
| Handover deadline | 24 months from the SPA date for landed homes; 36 months for strata homes |
| Late handover by the developer | Compensation worked out daily at 10% a year on the purchase price |
| After handover | A defect liability period of 24 months from vacant possession |
These figures apply to the statutory forms. Read your own SPA, as some projects may run on approved variations. The DLP guide covers what happens after the keys.
Progressive payment vs a completed home
| New project (progressive) | Completed or subsale home | |
|---|---|---|
| How the loan is released | In stages | In one go at completion |
| Interest at the start | Small, on released sums | Full instalment from the start |
| Waiting time | Until handover | Move in soon after completion |
| Risk to think about | Delay or project trouble | What you see is what you get |
Neither is better for everyone. Progressive payment eases cash flow during construction; a completed home lets you see the unit first.
Practical tips
- Keep every bill and certificate in one folder, in order.
- Forward bills to your bank at once; late payment interest is your cost, not the bank's.
- Check the developer's progress against the bills it sends.
- Budget for the jump to the full instalment.
- Keep your contact details up to date with both the developer and the bank.
Check before you sign
This page explains progressive payment in general. It is not legal advice. Ask your lawyer to walk you through the payment schedule and deadlines in your own SPA before you sign. For help with a specific property, WhatsApp Shyan Yee (REN 46305, IQI Realty) at +60 17-279 8932.
Frequently Asked Questions
What is progressive payment?
It is the way the price of a home under construction is paid. The developer bills in stages as building work is completed and certified, and the bank releases the loan in matching stages. You pay interest only on the amount released so far.
What is the difference between Schedule G and Schedule H?
Both are statutory sale and purchase agreements under the Housing Development (Control and Licensing) Regulations 1989. Schedule G is for a house sold with its land, such as a terrace or semi-detached home. Schedule H is for a strata unit, such as a condominium or apartment.
How much do I pay when I sign the SPA?
The first payment is 10% of the price, due on the date the SPA is signed, according to the National Housing Department. Any booking fee is normally deducted from it.
Can the developer bill me before work is done?
No. The National Housing Department states that a developer cannot accept instalments that are not supported by a certificate from the project's architect or engineer.
What happens if I pay late?
According to the National Housing Department, interest of 10% a year can be charged on an instalment unpaid more than 21 working days after written notice, and the SPA can be terminated if the default continues for more than 28 days. Read your SPA for the exact clause.
How long does the developer have to hand over the keys?
Under the statutory forms, 24 months from the SPA date for landed homes and 36 months for strata homes, according to the National Housing Department. If the developer is late, it must pay compensation worked out daily at 10% a year on the price.
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