Glossary of House-Building Terms

Acre, point, hectare

Units of land area on Malaysian titles. 1 acre = 43,560 square feet. 1 point (relung) = 435.6 square feet, one hundredth of an acre. 1 hectare = 107,639 square feet, roughly 2.47 acres.

BQ (Bill of Quantities)

A breakdown of every material and item of work with its quantity and unit price. A quotation calculated from a BQ is far more accurate than a per-square-foot rate, because it starts from the actual drawings. The detailed estimates in our catalogue are calculated this way.

Building setback

The minimum distance the council sets between your house and each boundary of the lot. It means you cannot build over the whole plot. Our land check uses a cautious estimate of 45% of the lot area as buildable; the real figure is set by the council and the shape of your lot.

CCC (Certificate of Completion and Compliance)

Issued by the architect or engineer who submitted the plans (the Principal Submitting Person), confirming the house was built to the approved plans and is safe to occupy. It replaced the older CF system in 2007. Without a CCC, your house is officially not yet fit to occupy.

CCRIS

The Central Credit Reference Information System, run by Bank Negara. A record of your loans and repayment pattern over the last 12 months. Every financier checks it. You can request your own report free, and it is worth doing before you apply.

CF (Certificate of Fitness)

The certificate of fitness for occupation under the old system, issued by the council. Replaced by the CCC. You may still hear the term used interchangeably with the CCC.

Charge

The interest a financier registers over your land title as security for the financing. It is removed when the financing is fully settled. This is why the land must be in the applicant's name before financing can be approved.

CIDB

The Construction Industry Development Board of Malaysia. Construction contractors must be registered with CIDB. Registration can be checked publicly on the CIMS portal, and you should check it for any contractor you are considering.

Conversion of land conditions

An application to the state Land Office to change a land's category or express conditions — for example, from agriculture to building. It involves a land premium and takes months. Do not wait for it to finish before checking your financing eligibility; both can be handled at the same time.

CTOS

A private credit reporting agency. Different from CCRIS: it covers court actions, bankruptcy and summons records. Old arrears you have forgotten sometimes appear here.

Design & build

A contract model in which one party is responsible for both design and construction. You do not appoint the architect and the contractor separately, so there is no room for disputes between them when something does not work on site.

DSR (Debt Service Ratio)

The percentage of your net income already going to debt repayments. Banks set a ceiling, usually around 60% if your net income is below RM5,000 and 70% at or above it. The DSR, not the advertised rate, is what decides how much you are approved for.

EPF Account 2

The part of your EPF savings that can be withdrawn for certain housing purposes. It is a source of cash, not a financing route. Limits and conditions are set by EPF and revised from time to time.

Express conditions

Specific conditions recorded on the title about the permitted use of the land — for example 'residential house' or 'agriculture'. They are checked together with the land category, and an agricultural condition blocks approval of a house even if the land category is building.

Fixed rate vs floating rate

A fixed rate does not change over the financing tenure — LPPSA offers a fixed 4.00%. A floating rate moves when the OPR moves, which means your monthly instalment can rise. Almost every bank home loan in Malaysia is floating rate.

Form G (G1–G21)

Stage certificates signed during construction by the professional responsible for each part of the work — foundations, structure, roof, wiring, plumbing and so on. The CCC cannot be issued until all are complete, and a Form G missing from a subcontractor is the most common cause of a delayed CCC.

Land title (geran)

The land ownership document. It states the registered owner, the area, the land-use category and the express conditions. The first two pages of your title are the most important documents in this whole project.

Land-use category

Recorded on the title: building, agriculture or industry. A residential house can only be approved on land in the building category. Agricultural land needs its conditions converted first, which involves a land premium and takes months.

Lock-in period

The early period of a bank loan during which settling it in full incurs a penalty, usually 3 to 5 years. Important if you plan to refinance or sell within that time.

LPPSA

The Public Sector Home Financing Board. It provides home financing for civil servants at a fixed 4.00%, with instalments deducted directly from salary. For building on your own land, no cash deposit is needed.

Margin of finance

The percentage of the property value a financier is willing to finance. 90% is the best case for a bank loan; 80% is more usual for building on your own land. The rest is your contribution — and when building on your own land, the value of the land you already own usually counts towards it.

MRTA / MRTT

Mortgage Reducing Term Assurance (or Takaful). Insurance that pays off the remaining financing if the applicant dies or becomes permanently disabled. Usually required by the financier, and the premium can be included in the financing.

OPR (Overnight Policy Rate)

The overnight policy rate set by Bank Negara. Floating home loan rates move with it. A 1% OPR rise adds roughly RM270 to the monthly instalment on a RM450,000 loan over 30 years.

PBT (local authority)

The local council that approves your building plans — a municipal council, district council or city hall. It also charges processing fees and sets the building setbacks and technical conditions.

Progress claim

A payment claim sent to the financier after a stage of work is completed and verified. The financier pays the contractor directly, so you do not hand over cash at each stage. This claim format is what panel contractor status makes smoother.

PSP (Principal Submitting Person)

The registered architect or engineer who submits the plans to the council and is responsible for issuing the CCC. Only registered professionals can hold this role — the homeowner cannot sign it themselves.

psf (per square foot)

How construction rates are published in Malaysia. Be careful when comparing: two quotations at the same psf can cover very different scopes, which is why the list of exclusions matters more than the rate itself.

Retention

The part of the final payment held back until the defects list is cleared — 5% in our schedule. It is the mechanism that makes sure defects are fixed before the contractor is paid in full, and it protects you.

Stamp duty

A tax charged on transfer and charge documents. For construction financing, it is charged on the financing documents. Some bank packages absorb this cost; ask specifically.

Variation order (VO)

A change of scope agreed after the contract is signed. It is agreed in writing, with a price, before the work is done. A VO during construction costs more than the same change made before work starts, because it involves redoing work or swapping materials.

Zero deposit scheme

Building with no cash deposit to the contractor, because the value of the land you already own acts as equity in the margin calculation. It is a real mechanism; it does not mean no cost at all, because legal fees, stamp duty, valuation and insurance still apply.

Come across a term you do not understand? WhatsApp us and we will explain it — and add it to this page if it helps others.