Schedule H Explained: How You Actually Pay for a KL New Launch

Why new launches are gentler on cash flow than they look

A RM1.5 million new launch does not require RM1.5 million (plus the 8% stamp duty) on day one. Malaysian law — Schedule H of the Housing Development Regulations 1989, which governs every licensed strata residential development — fixes exactly when each slice of the price falls due, tied to certified construction progress. You pay 10% at signing; the rest follows the building upward over roughly three years.

For foreign buyers this staging is a genuine advantage over sub-sale: your capital deploys gradually, and the state consent process resolves comfortably inside the construction window instead of holding up completion.

The Schedule H stage table

*Of the vacant-possession portion, 5% is held by a stakeholder solicitor and released in two tranches during the defect liability period after handover — your protection fund for defect rectification.

The exact Third Schedule wording in your SPA is authoritative; developers cannot lawfully demand payment ahead of it, and each claim must be certified by the project architect before your bank releases anything.

How the bank side works

If you finance at, say, 70% loan-to-value: your 30% cash covers the early stages, then the bank draws down against each architect-certified claim. During construction you pay progressive interest only — interest on the amount released so far, not full instalments. A rough feel: on a RM1M loan released halfway, interest at ~4.5% runs about RM1,875/month at that point, scaling up as stages complete. Full principal-and-interest instalments begin at vacant possession — which is also when maintenance fees and sinking fund contributions start. Budget a cushion for that step-up month.

Foreign buyers should note the drawdown mechanics mean your Malaysian loan account needs funding discipline across three years, not one transfer. Set up standing arrangements early — currency transfer timing is something we walk every overseas client through. For a full picture of how Malaysian banks structure foreign-buyer lending, see our foreigner mortgage guide.

The protections built in

• 36-month delivery deadline for strata, with Liquidated Ascertained Damages at 10% per annum of the purchase price for any delay — automatic, not negotiable away. Decline any document that waives it.
• Payments track certified progress, so you are never paying for concrete that doesn’t exist.
• Licensed developers bank buyer payments through regulated Housing Development Accounts.

These protections are exactly what was missing or breached in KL’s historical abandoned projects — a subject we address directly in our KL360 review, since that tower is the revival of one of them. The protections are real, but so is the value of choosing developers and contractors with the balance sheet to finish.

This guide is general information, not legal advice. Rules are current as of July 2026 and do change — we verify at transaction time for every client.