Friday, May 31, 2013

EPF Withdrawal to purchase / build a house

Withdrawal to purchase / build a house

This scheme allows individuals (or joint purchasers) to withdraw money from their EPF Account 2 to purchase a house (type: bungalow / terrace / semi-detached / apartment / condominium / studio apartment / service apartment / townhouse / SOHO) or a shop lot with residential unit, from a developer, individual, or in a public auction.
To apply, the Sale and Purchase Agreement (SPA) as well as the Housing Loan Approval Letter (unless the house was paid for in cash) or Loan Facility Agreement must be submitted at the time of the application. You can walk in to any KWSP office to submit the KWSP 9C (AHL) (D5) Withdrawal Form , along with the supporting documents or submit via postal services.
In most cases, it would mean that you will have to pay for the following upfront costs first and complete the following before applying for a withdrawal:
  1. Booking fee + Down payment for the house.
  2. Lawyer fees and stamp duty for the Sale and Purchase Agreement.
  3. Obtain the at least the letter of approval for the housing loan.

Withdrawal limits

  1. Money from EPF Account 2 can be used to pay the price difference between the SPA house price and the housing loan amount, up to an additional 10% on the price of the house. So if a full housing loan (100%) is obtained, the maximum that can be withdrawn is up to 10% of the price of the house.
  2. If the house was purchased using cash, up to 110% of the price of the house can be withdrawn.
  3. Any withdrawal amount is always subject to whatever money is available in the applicant’s (and where applicable, joint applicant’s) Account 2.

Eligibility for withdrawal

  1. Withdrawal to purchase the first house.
  2. Withdrawal to purchase a second house, provided the first house is sold, or disposal of the property has taken place.
The full list of T&Cs plus the necessary supporting documents can be found at this section for purchase or this section for bulding a house at KWSP’s website.