Guidelines for foreigners buying a house in Malaysia
For all foreigners & expats: Check out our guide which details the property purchasing process and information on MM2H.
Foreign ownership of property is liberal (foreigners can own 100% of the property) in Malaysia as long as minimum requirements are met. In law, foreigners can own any type of properties EXCEPT the following:
- Properties valued less than RM1 million in most of the major states.
- Properties built on Malay Reserved land
- Low and medium cost residential units as defined by the state authority
- Properties distributed to Bumiputera interest in any development project as determined by the state authority.
- Do take note that there are two types of property tenure:
- Leasehold (99 years but renewable)
2. What is the minimum property purchase price in each state with or without MM2H?
*Zones in Selangor
Zone 2 – Districts of Kuala Selangor & Kuala Langat
Zone 3 – Districts of Hulu Selangor and Sabak Bernam
NOTE: In the state of Selangor, foreign purchasers are prohibited from:
- Purchasing landed residential properties unless said property is issued with a landed strata title (e.g. gated community).
- Buying auction properties
- Purchasing agricultural land
3. What are the procedures for foreigners to acquire property?
- Sign the developer’s sales form or the offer to purchase form with the vendor, for sub-sale transactions.
- Apply for financing to purchase the property (if necessary)
- Provide the following documents to the solicitor:
- photocopy of passport
- correspondence address and contact number(s)
- income tax number & the place of submission of the income tax (applicable for sub-sale purchase only).
- Within 14 days from the date of signing of the sales form (or offer to purchase), sign the SPA, deed of the mutual covenant (if applicable) and other transactional documents. Pay the 10% deposit to the developer/vendor.
- Solicitor to apply for state authority consent. Purchaser to provide the following documents to the solicitor:
- 1 certified true copy of the SPA
- 1 certified true copy of the Foreign Purchaser’s passport
- 1 certified true copy of constitution (if the purchaser is a foreign company)
- Latest quit rent and assessment receipt of the property
- Application form under Section 433B of the NLC
- Pay the balance purchase price in accordance with the Third Schedule of Schedule H Housing Development (Control And Licensing) (Amendment) Regulations 2015 (“Schedule H”) or the SPA.
- Pursuant to Schedule H, the developer shall deliver vacant possession of the property within 36 months from the date of the SPA (or such later date as may be approved by the relevant authority). Upon delivery of vacant possession, the developer shall deliver the strata title and certificate of completion and compliance to the foreign purchaser. In the case of a sub-sale transaction, the vendor shall deliver vacant possession to the purchaser in accordance to the terms of the SPA.
4. What are the costs involved?
Let’s say you are purchasing a home worth RM1.5 million. The final RM0.5 million amount will cost you RM20,000 (4% X RM500,000), bringing the total stamp duty to be paid to RM44,000.
Real Property Gains Tax (RPGT)
Loan stamping fees
Door tax & title deed
5. How do I transfer the funds if I choose to purchase a property in Malaysia using cash?
6. Can I purchase a property with 2 or more individuals?
7. Will the total square footage of properties sold in Malaysia include the common area?
8. How do I furnish my units & who can manage my units for me?
9. What are the home loan financing options?
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*This article was repurposed from https://www.iproperty.com.my/guides/guidelines-for-foreigners-buying-a-house-in-malaysia/ , first published on iproperty.com.my