Malaysia unveils Kota MADANI smart city, boosts public housing with RM20b loan guarantees
The Malaysian Reserve, 10 October 2025
BUDGET 2026 is expanding Malaysia’s public housing agenda with landmark projects such as Kota MADANI Presint 19, enhanced homeownership schemes for the self-employed, and large-scale upgrades to low-cost housing nationwide.
Prime Minister cum Finance Minister Datuk Seri Anwar Ibrahim said the Kota MADANI concept was born from the nation’s inner strength to realise the spirit of MADANI to create liveable, sustainable cities that balance physical growth with human well-being.
“The Kota MADANI Presint 19 project will be Malaysia’s first integrated smart, AI-driven and green city, featuring 10,000 homes, of which 80% are reserved for civil servants,” he said during the tabling of Budget 2026.
Vertical schools and integrated urban living
To optimise urban land use, the government will pioneer “Sekolah Vertikal,” vertical schools integrated with residential buildings in dense urban areas.
Three pilot projects will be launched at Kota MADANI Presint 19, Putrajaya; Rumah Bakat MADANI SkyWorld Pearlmont, Seberang Perai, Penang; and Residensi Aman MADANI, Bandar Sri Permaisuri, Kuala Lumpur
These projects aim to create compact, self-contained communities with educational, residential and green spaces under one roof.
The government will also continue its nationwide housing initiatives under Residensi Rakyat and Rumah Mesra Rakyat, allocating RM672 million to benefit 33,000 residents through upcoming projects such as PRR Ayer Lanas in Kelantan and PRR Masai in Johor.
Home financing support will also expand significantly, with Syarikat Jaminan Kredit Perumahan (SJKP) doubling its guarantee fund from RM10 billion to RM20 billion, allowing more gig workers and self-employed Malaysians to access first-home loans.
A further RM500 million will be channelled to rebuild or refurbish 3,300 dilapidated houses, including 380 homes for fishermen.
More funds will go toward improving living standards in low- and medium-cost housing.
The government has allocated RM143 million to maintain strata housing, including replacing old lifts, and RM90 million to enhance infrastructure in New Villages and Indian settlements.
An additional RM95 million will be used to refurbish public toilets and parks across local councils.
PPR communities will also benefit from social programmes such as Bomba Bersama Rakyat, promoting fire and water safety, and Sukan Rakyat, which offers recreational and health activities for senior citizens.
Tax and market incentives for housing growth
To make homeownership more accessible, first-time homebuyers will continue enjoying full stamp duty exemption on transfer and loan agreements for homes priced up to RM500,000, extended until Dec 31, 2027.
Meanwhile, foreign individuals and companies will be subject to a flat stamp duty rate of 4–8% for property transfers, excluding permanent residents, to ensure the local property market remains competitive and affordable.
The government also proposes a 10% special tax deduction (capped at RM10 million) for the conversion of commercial buildings into residential spaces, encouraging urban renewal and efficient use of vacant properties.
“Public housing must not only provide shelter but foster dignity, inclusivity and opportunity,” Anwar said.
Inclusive support for faith-based infrastructure
Recognising Malaysia’s multicultural fabric, RM50 million has been set aside for the repair and maintenance of registered non-Muslim places of worship, including those in Sabah and Sarawak.
The Budget 2026 housing agenda marks a shift toward smarter, greener and more inclusive urban living to ensure that every Malaysian, from city dwellers to rural communities, can access affordable, dignified housing.
“Our goal is clear, which is to build not just cities of concrete, but communities of compassion,” Anwar added.