Guidelines on Withdrawal of EPF

Other than financing from a bank or financial institution, the Employees Provident Fund (EPF) currently provides two schemes of withdrawal for its depositors prior to attaining the age of 50:-

  1. for purposes of buying or building a house or a shophouse consisting of a residential unit, depositors can withdraw the difference between the purchase price and the loan obtained plus 10% of the purchase price, or 30% of the total amount deposited in the EPF whichever is lower; or
  2. for purposes of reducing or setting housing loans, depositors can withdraw 30% of the total amount deposited in the EPF, or the amount of the housing loan remaining outstanding, whichever is lower.

EPF guidelines withdrawals from the fund for the purpose of :

  • Purchasing a house
  • Reducing/settling outstanding private housing loan

Purchasing a house

Withdrawal to buy build house or shop house

With effect from 1 November 1994, EPF BOARD introduced a new system whereby the contributions standing to the credit of and received in respect of each member shall be apportioned into three (3) accounts as follows:

ContributionsPurpose of account
Account I - 60%For retirement
Account II - 30%For housing and pre-retirement plans
Account III - 10%For medical expenses

30% of the amount standing to the credit of the member is kept in Account II which may be withdrawn for housing purposes. It may also be withdrawn, upon the member reaching the age of 50, for retirement plans to be made.

Housing Purposes

For housing purposes:
  1. The withdrawals is to enable the member to:
    • buy/build a house or shop house with residential unit
    • reduce/settle balance of housing loan
  2. A member is eligible to apply for withdrawal, if he:
    • is buying/building a house or shop house with residential unit;
    • has not made any previous withdrawal for housing purposes;
    • has entered into a sale and purchase agreement to buy/build a house within two years prior to the date of receipt of the application by EPF Board ;
    • has made a previous withdrawal but the house has been sold.
For those who have entered into the sale and purchase agreement exceeding the two years period:
  1. they are eligible to make withdrawal under the Withdrawal to reduce/settle balance of housing loan scheme if he has not attained the age of 55 at the time of application.
  2. A member is ineligible to apply if he:
    • is buying only vacant land or house excluding land
    • is buying the house on hire-purchase
    • is carrying out renovations repairs and additional works to existing house
For individual/joint purchases:

the members may make withdrawals from the Fund for an amount equivalent to:

  • amount of difference between the cost price and the loan with an addition of 10% of the cost price; or
  • the whole amount standing to the credit of the individual/joint members whichever is the lower.
For joint purchases:

the EPF Board will process the application from the first purchaser and if the amount so withdrawn is insufficient to meet the total eligible amount required, then only the application from the second purchaser will be processed.

How to apply for withdrawal

An application for withdrawal may be made by submitting form KWSP 9C (AHL) (obtainable free of charge from any EPF office), in duplicate, together with the following documents:

Purchase from Developer
  1. 1st Withdrawal :
    • Photostat copy of identity card, duly certified;
    • Sale and Purchase Agreement and copy thereof;
    • If housing loan is obtained, produce loan approval letter/loan agreement and copy thereof; and
    • letter of explanation from member (if the loan is less than 50% from the buying price);
  2. 2nd Withdrawal :
    • A copy of the Form 14A (MOT);
    • Copy of the Issued Document of Title or Deed of Assignment (duly certified) ;
    • Sale and Purchase Agreement and copy thereof.
  3. If no loan is obtained, produce ;-
    • letter from developer requesting for progress payments together with the architect’s certificate ;
    • receipt to show that at least 20% of the purchase price has been paid OR produce original title deed/deed of assignment duly transferred/executed in member/purchaser’s name and copy thereof.
  4. If a housing loan is obtained, produce:
    • housing loan approval letter with a copy thereof ; or
    • housing loan agreement (if application is later than a year)
Purchase from private person/public auction:
  1. Photostat copy of identity card, duly certified
  2. Sale and purchase agreement in respect or purchase from private person or proclamation/certificate of sale issued by the court in respect of auction conducted by the court ;
  3. Letter of consent for transfer approval from the developer/Land Office (if property is by way of assignment or subject to restriction)
  4. Title deed/Deed of Assignment in the name of vendor (if the property is not subject to any restriction of interest)
  5. If a housing loan is obtained, produce:
    • housing loan approval letter with a copy thereof;
    • Letter of explanation from member (if the loan is less than 50%)
  6. If no housing loan is obtained, produce:
    • the Title Deed/Deed Assignment in the name of the member/purchaser, with a copy thereof, or
    • Confirmation letter from the lawyer in-charge regarding cash purchases;
    • receipt to show that 20% of the purchase price has been paid, with a copy thereof
Building own house
  1. Photostat copy of identity card, duly certified;
  2. the building contract or in the absence of a building contract, a statutory declaration with regard to the construction of the house the Title Deed to the land registered in the name of the member or the spouse of the member with a stamp thereof;
  3. completed building plan (if it is in the Local Council area) ;
  4. Copy of Issued Document of Title (duly certified).
  5. If a housing loan is obtained, produce:
    • housing loan approval letter/loan agreement, with a copy thereof;
    • agreement letter for 1st progress payment together with the Architects Certificate
  6. If no loan is obtained, produce:
    • a receipt to show that not less than 20% of the price of construction has been paid, with a copy thereof;
    • letter requesting for stage by stage payment together with the Architect's Certificate (if any)
  7. Joint application
    • Joint application are required to submit documentary evidence of their relationship such as Marriage Certificate, Surat Nikah, Birth Certificate;
    • Deed of Assignment or Tittle Deed at the time the application for withdrawal is made;
    • A Statutory Declaration from the first proprietor if the first proprietor has no intention to make application for withdrawal.

Reducing/settling outstanding private housing loan

Withdrawal to settle/reduce housing loan

A member may withdraw his EPF credit in Account II in order to reduce/settle any outstanding housing loan. Such withdrawal may be made once in every 5 years until the member attains the age of 55 years.

A member is eligible to withdraw:

  • the total amount standing to his credit Account II, or
  • the total outstanding balance of the housing loan, whichever is the lower

For joint purchases, the EPF Board will process the application from the first purchaser and if the amount so withdrawn is insufficient to meet the total eligible amount required, then only the application from the second purchaser will be processed.

How to apply for withdrawal?

An application for withdrawal may be made by submitting Form KWSP 9 (MP), in duplicate, together with the following documents:

  1. Photostat copy of identity card, duly certified ;
  2. Sale and Purchase Agreement/Contract to build house ;
  3. Letter of approval for housing loan (Subsidises)/Loan agreement (Subsidises);
  4. Title Deed/Deed of Assignment ;
  5. Statement of balance of Housing Loan issued by Lender showing particulars of the borrower, housing Loan a/c no., particulars of property and outstanding amount of loan due as at date of application (if such documents are in custody of the chargee, they should be certified by the chargee) ;
  6. Copy of Loan Agreement with Form 16N (Charge) or Loan Agreement Cum Assignment with Deed of Assignment.
Joint Application

In case of joint application, the member is required to submit a statutory declaration from the first borrower, if he is also a EPF member, to the effect that he has no intention to withdraw his EPF credit.

Examples

Case 1:

All the savings from Account 2 are eligible to be withdrawn.

En. Ahmad bought a house at RM 75,000 and obtained a loan for RM60,000. He has an EPF savings of RM 18,000 in Account 2. How much would he be eligible to withdraw?

Calculation:
Price of houseRM 75,000
Minus Loan Amount obtainedRM 60,000
Difference between the aboveRM 15,000
Add 10% from Price of HouseRM 7,500
Amount eligible to withdrawRM 22,500
Savings in Account 2RM 18,000

Because Encik Ahmad only has a savings of RM 18,000 in his Account 2, which is lower than the eligible amount of RM 22,500, Encik Ahmad is therefore only allowed to withdraw RM18,000.

Case 2:

All the savings in Account 2 are eligible to be withdrawn because the EPF members has not applied for housing loan. En. Ismail purchased a house at RM 125,000. He did not apply for a housing loan. He paid the housing developer RM 35,000. His EPF savings is RM 60,000 in Account 2.
Calculation:
Price of houseRM 125,000
Minus Loan Amount-
Difference between the aboveRM 125,000
Add 10% from Price of HouseRM 12,500
Amount eligible to withdrawRM 137,500
Savings in Account 2RM 60,000

Because Encik Ismail has only RM60,000 in Account 2, therefore he can only withdraw RM60,000 only.

Case 3:

The housing loan difference amount and the 10% addition of the House Price is eligible to be withdrawn En Chong purchased a house from En. Ismail at RM 95,000 and obtained a housing loan of RM 87,000. En. Chong has RM 60,000 in his EPF Account 2.

How much savings is he eligible to withdraw?

Calculation:
Price of houseRM 95,000
Minus Loan AmountRM 87,000
Difference between the aboveRM 8,000
Add 10% from Price of HouseRM 9,500
Amount eligible to withdrawRM 17,500
Savings in Account 2RM 60,000

The amount En Chong is allowed to withdraw is RM 17,500

Case 4 :

10% from the Price of House is allowed to be withdrawn. (for renovation cost) En. Baharom and Pn. Haslina purchased a house for RM 100,000. En. Baharom obtained a housing loan of RM 100,000. En. Baharom has RM 9,000 in his EPF Account 2. On the other hand, Pn. Haslina has RM 3,600 in her Account 2.

How much can be withdrawn by both of them?

Calculation:
Price of houseRM 100,000
Minus Loan AmountRM 100,000
Difference between the above-
Add 10% from Price of HouseRM 10,000
Amount eligible to withdrawRM 10,000
En. Baharom's savings in Account 2RM 9,000
Pn. Haslina's savings in Account 2RM 3,600

In the event that the member obtains a 100% housing loan, the eligible withdrawal amount from the price of the house is RM 10,000 for side cost.

En. Baharom is eligible to withdraw RM 9,000 and Pn. Haslina is allowed only RM 1,000. This makes the amount eligible to be withdrawn RM 10,000.

Case 5:

Should the member not apply for a housing loan, both members are allowed to withdraw all of the savings in Account 2. En. Ramasamy and Pn. Leela purchased a house for RM 125,000. They did not apply for a housing loan to purchase the house. They managed to pay the housing developer RM 35,000. En. Ramasamy has a saving of RM 60,000 in his EPF Account 2. Pn. Leela on the other hand, has RM 30,000 in her Account 2.

How much savings are they allowed to withdraw?

Calculation:
Price of houseRM 125,000
Minus Loan Amount-
Difference between the aboveRM 125,000
Add 10% from Price of HouseRM 12,500
Amount eligible to withdrawRM 137,000
En. Ramasamy's savings in Account 2RM 60,000
Pn. Leela's savings in Account 2RM 30,000

En. Ramasamy is only allowed to withdraw RM 60,000 and Pn. Leela is allowed to RM30,000. Therefore they are only eligible to withdraw RM90,000 in total.

Note : All bank account statements submitted must single account holder and strictly no joint account.

Useful Contacts

AFFIN BANK BERHAD03-2055 9000
AM BANK BERHAD03-2026 3939
BANK ISLAM MALAYSIA BERHAD03-2693 5566
BANK MUAMALAT MALAYSIA BERHAD03-2698 8787
BANK PEMBANGUNAN03-2615 2020
BANK PERTANIAN03-2692 2033
BANK RAKYAT03-2612 9600
BANK SIMPANAN NASIONAL03-2162 3222
BANK UTAMA082-419 294
BUMIPUTRA-COMMERCE03-2693 1722
CITIBANK03-2070 1111
EON BANK03-2694 1188
HONG LEONG BANK03-2164 2828
HSBC03-2070 0744
MALAYSIAN BUILDING SOCIETY BERHAD03-255 4000
MAYBANK03-2070 8833
PUBLIC BANK03-2163 8888
RHB BANK03-9287 8888
SOUTHERN BANK BERHAD03-2163 7000
KWSP/KUMPULAN WANG SIMPANAN PEKERJA03-2694 6566
BAM/LEMBAGA ARKITEK MALAYSIA03-2698 2878
LHDN/LEMBAGA HASIL DALAM NEGERI03-6201 7055