Schedule H progressive payment stages: how you actually pay for an under-construction condo in Malaysia
Buying a new-launch condo in Malaysia means paying in statutory instalments fixed by Schedule H of the Housing Development (Control and Licensing) Regulations 1989 (as amended in 2015). You pay 10% on signing the SPA, then 65% in eight stages as construction is certified - foundation 10%, structural frame 15%, walls 10%, roofing/wiring/plumbing 10%, finishes 10%, sewerage 5%, drains 2.5%, roads 2.5% - then 17.5% at vacant possession, 2.5% when the strata title and transfer are handed over, and a final 5% held by the developer's solicitor as stakeholder, released 2.5% at 8 months and 2.5% at 24 months after VP to cover defects. Landed houses use Schedule G: same construction stages, but 12.5% at VP and a 24-month (not 36-month) delivery deadline.
Each stage is claimed only against the developer's architect or engineer certificate, your bank releases the loan portion stage by stage, and during construction you pay progressive interest only on the amount actually released. Full principal-plus-interest instalments start after the final drawdown at VP.
What are the exact Schedule H and Schedule G payment stages?
These numbers come from the Third Schedule of the statutory SPA itself - the developer cannot reorder them, front-load them or add stages. Schedule H (strata: condos, apartments, serviced residences under the HDA) is on the left; Schedule G (landed, individual title) on the right.
| Stage | Schedule H (strata) | Schedule G (landed) |
|---|---|---|
| 1. On signing the SPA | 10% | 10% |
| 2(a). Work below ground level / foundation | 10% | 10% |
| 2(b). Structural framework (reinforced concrete frame) | 15% | 15% |
| 2(c). Walls with door and window frames in position | 10% | 10% |
| 2(d). Roofing/ceiling, wiring, plumbing, gas, telecom | 10% | 10% |
| 2(e). Internal and external finishes / plastering | 10% | 10% |
| 2(f). Sewerage works serving the building | 5% | 5% |
| 2(g). Drains serving the building | 2.5% | 5% |
| 2(h). Roads serving the building | 2.5% | 5% |
| 3. Vacant possession; water, electricity ready to connect | 17.5% | 12.5% |
| 4. Transfer instrument and original title delivered | 2.5% | 2.5% |
| 5. Held by solicitor, released 8 and 24 months after VP | 5% | 5% |
| Total | 100% | 100% |
- Stage 2(d): roofing/ceiling, electrical wiring, plumbing (no fittings), gas piping, telecom trunking.
- Stage 4: the transfer instrument plus the original strata / individual title delivered.
- Stage 5: held by developer's solicitor as stakeholder: 2.5% released 8 months after VP, 2.5% at 24 months.
Two clauses that matter as much as the table: under Schedule H the developer must deliver vacant possession within 36 months of the SPA date (clause 25), and the defect liability period runs 24 months from VP (clause 30) - which is exactly why the last 2.5% sits with the solicitor for 24 months. Schedule G's delivery deadline is 24 months. Source: the Schedule H text as gazetted under P.U.(A) 106/2015, and the Schedule G form published by the House Buyers Association; the 8- and 24-month stakeholder release for landed is also confirmed in law firm HHQ's note on stakeholder solicitors.
Who certifies each stage and how does the bank release the money?
The developer's architect or engineer certifies, the developer's solicitor issues the notice, and your bank pays. The sequence for every stage after signing:
- The developer's architect (or engineer) certifies that the stage - say, the structural frame - is complete.
- The developer's solicitor sends you and your bank a written progress claim with that certificate attached. Under Schedule H you have 30 days to pay (Schedule G: 21 working days).
- Your bank releases the matching slice of the loan directly to the developer's Housing Development Account. Only the portion you are financing yourself (typically the first 10% and any amount above your loan margin) leaves your pocket.
- Pay late and Schedule H lets the developer charge late payment interest at 10% per annum on the overdue instalment - which is why buyers should keep their bank's drawdown paperwork current.
Because the bank funds against certificates, the visible site progress and your bank statement should march together. If the loan is at 70% (a third-property purchase) or you are paying part of the price in cash, the developer's claims come to you for the difference each time - budget for it. The full purchase sequence from booking to keys is in buying new property step by step, and the legal framework that makes these stages compulsory is explained in what is the HDA (Act 118).
How is progressive interest calculated - and why does month 30 hurt more than month 3?
Interest is charged only on the loan amount released so far, at the loan's rate, and it rises with every certified stage. In the first months only the foundation slice is out, so the bill is small; by the time walls, roofing and finishes are certified, most of the loan is drawn and the monthly interest is close to a full instalment's interest component - while you are still paying rent elsewhere.
Published guides describe the pattern rather than a formula: a few hundred ringgit a month in year one, climbing steeply in year two and three as the cumulative percentage passes 60-70%. The exact monthly figure is simply (cumulative amount released) x (annual rate) / 12 - work it for your own price and rate in progressive interest and cash flow, which also shows the total interest paid before you ever move in.
Three things that change the cash-flow picture:
- Developer interest-bearing schemes (DIBS-style absorptions): the developer pays the progressive interest until VP. The cost is in the price, not free - see developer sales tricks.
- A slow site: fewer certificates means less interest, but it also means your rent runs longer and the LAD clock is what protects you.
- Full-flexi loans: parking cash against the drawn balance during construction cuts the interest; the product differences are in full-flexi vs semi-flexi.
What if the developer is late, stalls, or the project turns sick?
Late means money owed to you; stalled means stop paying anything outside the SPA and check the KPKT register.
- Late delivery: if VP is not delivered within 36 months (strata) or 24 months (landed), the statutory SPA entitles you to liquidated damages calculated at 10% per annum of the purchase price for the delay period - the claim mechanics, deadlines and the Tribunal route are in claiming LAD for late delivery.
- Stalled site: the progressive schedule protects you here - no certificate, no claim, no drawdown. Your exposure is what has already been released plus the interest on it. Never pay any "top-up" or off-SPA sum to keep a project moving.
- Sick or abandoned: KPKT classifies projects more than 30% behind schedule as Sakit; a site idle for six months can be declared Terbengkalai. Check the project's status at our free KPKT check before you sign, and read your rights when a project turns sick if it happens after.
The stakeholder sum is your leverage after VP. That 5% held by the developer's solicitor is released only at 8 and 24 months, and only if defects notified during the defect liability period are rectified; if the developer ignores a defect notice, the SPA lets you have it fixed and recover the cost from the sum. How to run a proper defect inspection is in handover and defect liability.
Frequently asked questions
Can a developer ask for more than 10% on signing?
No. Schedule H fixes the first instalment at 10% and prohibits collecting any sum before the SPA other than as prescribed - the 2015 amendment extended the ban on booking fees to stakeholders too. Discounts and rebates change the price, never the percentages.
Is the 10% deposit paid from my loan or my own money?
Your own money, unless the developer rebates it. Banks lend up to 90% (70% for a third property), so the loan funds stages 2 onward. Some launches structure a rebate so the cash you hand over is less than 10% - the SPA still shows 10%.
How do I know a stage really is complete before my bank pays?
Each claim must carry the developer's architect or engineer certificate. You are entitled to visit the site and to ask the bank for the certificate; if the claimed stage is visibly not done, tell your bank in writing before the 30-day window closes.
When does my full monthly instalment start?
After the final drawdown, which is normally the 17.5% plus 2.5% at vacant possession. Until then you pay progressive interest on the released balance only; the loan's tenure clock and principal repayment begin after full release.
Does Schedule H apply to serviced apartments and SOHOs?
Only if the project is licensed under the HDA - most serviced apartments sold as residences are, but some commercial-title SOHO/SOVO units are not, and then the developer's own contract and payment terms apply. See SOHO, SOVO, SOFO vs condo.
General information based on the Schedule G and Schedule H statutory sale and purchase agreements under the Housing Development (Control and Licensing) Regulations 1989 as amended in 2015 - not legal or financial advice. Projects licensed before 1 July 2015 may still use the earlier forms; read the Third Schedule of your own SPA and have your lawyer confirm it matches.