The Housing and Local Government Ministry (KPKT) said on 15 October 2026 that it is studying an option-to-purchase (OTP) mechanism for new private housing. Under the idea, buyers would pay up to 5% of the price before signing the SPA, get a full refund plus accrued interest if the developer decides not to proceed, and developers would have to honour the indicative price first offered. It is a study, not a rule: no start date or framework has been announced. Until then, today’s informal booking-fee practice still applies, so protect your deposit with the steps below.
A clearer step before the SPA. Not law yet.
What KPKT announced this week
Housing and Local Government Minister Nga Kor Ming raised the idea at the Malaysia Developer Awards 2026 on 14 October, and KPKT followed with a statement on 15 October. The ministry described a more structured pre-SPA step for new launches:
- Buyers would pay up to 5% of the proposed purchase price to secure an option, and could submit financial information for a loan assessment.
- Developers would get a set period to gauge genuine demand before committing, and would have to honour the indicative selling prices they first offered.
- If the developer does not proceed, buyers would receive a full refund plus accrued interest.
KPKT’s stated aims are price certainty for buyers, clearer demand signals for developers, and fewer sick or abandoned projects. The ministry gave no implementation date and no detailed framework, and said the mechanism remains under study. Earlier in 2026, KPKT linked a similar OTP clause to the proposed Real Property Development Bill.
How booking fees work today, and why it matters
Most buyers of a new launch pay a booking fee before the SPA is signed. That habit sits in a grey area. The National House Buyers Association (HBA) has pointed out that Regulation 11(2) of the Housing Development (Control and Licensing) Regulations 1989 bars collecting payments outside what the sale contract prescribes, and the statutory SPA makes the first 10% payable on signing. HBA says enforcement has been lax, and buyers often struggle to get “refundable” booking fees back.
| Issue | Booking fee today | OTP idea under study |
|---|---|---|
| Legal footing | Informal practice; HBA says it conflicts with Reg 11(2) | A defined pre-SPA step (framework not yet published) |
| Amount | Set by each developer or agent | Up to 5% of the proposed price |
| If the developer pulls out | Depends on the booking form | Full refund plus accrued interest |
| Price you were quoted | Indicative prices can change before launch | Developer must honour the indicative price |
| Loan check | Usually after booking | Buyer can submit financial info for loan assessment |
| If the buyer walks away | Fee often forfeited or partly refunded | Not yet specified; watch for KPKT’s framework |
HBA’s own proposal, published in May, was more buyer-friendly on amount: an option fee capped at RM5,000 or 1% of the price, whichever is lower, a 30-day option period and refunds within 14 days. KPKT’s “up to 5%” is higher, so the final cap is something to watch.
Why the ministry is pushing this: abandoned projects
The OTP idea is tied to KPKT’s goal of zero sick housing projects by 2030. In Parliament this month, the minister said 1,726 private projects, covering 199,643 units and about RM158 billion in GDV, had been revived since the 2023 task force, as at August 2026. In Kuala Lumpur, seven projects were still listed as abandoned and 12 as sick at 31 August (Bernama, via EdgeProp).
The logic: if developers can test real demand with committed, refundable options before signing SPAs, fewer projects should launch, sell weakly and stall. It will not fix every risk. HBA has argued separately that weak developer finances and construction problems need other tools, such as the build-then-sell model.
What it could mean for you as a buyer
If the OTP is introduced roughly as described, three things improve for buyers: a clear legal basis for the money you pay before the SPA, price certainty on the unit you chose, and a refund with interest if the project does not go ahead. A loan assessment at option stage also helps you avoid paying for a unit you cannot finance, which matters now that housing loan approvals have fallen. I covered that in how to get your home loan approved in 2026.
The open questions are the buyer-side rules: what happens to your option fee if you withdraw, how long the option lasts, and whether 5% becomes the norm rather than the ceiling. Wait for KPKT’s framework before assuming anything.
Protecting your booking fee today: a checklist
- Get a written booking form or receipt that names the developer, unit, price and the refund terms, and pay to the developer’s or solicitor’s account, not a personal account.
- Check the developer’s licence and advertising permit on KPKT’s TEDUH portal, and look up their track record. Our off-plan developer checklist shows what to look for.
- Get pre-assessed for a loan first, so a rejection does not cost you the fee. Use our free loan eligibility check.
- Know what you pay at SPA. The statutory 10% is due on signing; read how progressive payment works.
- Compare nett prices, not headline prices. Rebates change the real cost. See our negotiation guide.
- Check first-home stamp duty relief if you qualify. Details in our Budget 2027 guide.
💡 My practical view: an OTP with a refund-plus-interest promise would be a real step up from today’s booking forms, and serious developers should welcome it. But do not delay a good purchase waiting for it; it has no start date. Book only with a reputable developer, keep every receipt, and make sure your loan is ready before you pay anything.
Frequently asked questions
What is an option to purchase (OTP) for new homes in Malaysia?
Is the booking fee for a new launch legal in Malaysia?
Will I get my booking fee back if my loan is rejected?
Booking a new launch soon?
WhatsApp DMS Team. Our consultants in KL and JB will check the developer, the booking terms and your loan eligibility before you pay, free of charge.
About the author: Jason Chan (DMS Jason Chan)
Jason is a registered real estate negotiator (REN 78007) and founder of DMS Team, a property consultancy registered under EUM Realty Sdn Bhd [E(1)1708] with consultants across Kuala Lumpur and Johor Bahru. He researches and reviews every market analysis published on dms-team.com.
This article is general information as at 19 October 2026, written from an agent’s practical perspective. It is not legal or financial advice. The OTP mechanism is under study by KPKT and may change or not proceed; confirm with official KPKT announcements and a lawyer before relying on it.
Sources: EdgeProp: KPKT studies option-to-purchase mechanism with payments of up to 5%; EdgeProp Daily Digest, 16 October 2026; EdgeProp Daily Digest, 14 October 2026 (revived projects, Bernama); EdgeProp: HBA on legalising booking fees; KL Property Talk: KPKT mulls OTP clause (May 2026).
Last updated 19 October 2026 · DMS Jason Chan, REN 78007