Foreigner Buy Property in Malaysia

Buying a property can either be an exhilarating or a stressful phase of your life. This phase seems especially more puzzling to foreigners since they are not the citizens of the country. On top of that, the home buying process can vary from state to state, depending on local customs.

Buyers, especially foreign first-time home buyers, need a basic overview before stepping into the field. So, if you are a foreigner and willing to buy a property in Malaysia, here is a guide to help you along your path to becoming a homeowner.

Malaysia as a place to buy property

Malaysia is super affordable when it comes to buying properties in comparison to other countries in Southeast Asia. The country has seen high growth in the last two decades; and it has still managed to maintain its low buying costs. You can get considerable value for money if you are in the right place.

A foreigner can take out loans easily from banks and there are no restrictions to exchange funds from other countries. Having relatively low Real Property Gains Tax (RPGT) – mainly through holding the property for more than five years – makes Malaysia the right place to think about when buying properties as a foreign national.

Types of properties that foreigners can purchase

After fulfilling some minimum conditions, home ownership in Malaysia is comfortably easy for the foreigners. More so, since there is a chance of owning 100% of the property.

As per law, the only restricted properties that foreigners can’t own are:

• Properties on Malay Reserved Land
• Properties that cost less than RM1 million
• Properties that are of Bumiputera interest in any developmental project
• Properties like low and medium cost residential units

So, opportunities to own terraced houses, industrial and agricultural lands, bungalows, commercial property and more, are open.

Despite the relatively high requirement, one clear advantage of the MM2H programme is that it provides cheaper property price tags to foreigners.  The table below shows the lowest value of residential property foreigners can buy with and without MM2H:

*Zones in Selangor
Zone 1 – Districts of Petaling, Gombak, Hulu Langat, Sepang and Klang
Zone 2 – Districts of Kuala Selangor & Kuala Langat,
Zone 3 – Districts of Hulu Selangor and Sabak Bernam

Steps to purchase a property

Foreigners can buy their properties through the following steps:

1. A form needs to be signed which is called the developer’s sales form or the offer purchase form. This form will be given by the seller for sub-sale transactions.
2. If it is necessary, they can to apply for a loan – check your loan eligibility by clicking here 
3. They have to submit some documents – passport’s photocopy, contact number, address, income tax number and the place where the tax is submitted (applicable for sub-sale purchase only) – to the legal representative.
4. Within a couple of days from the date of form signing, they have to finish signing the SPA, mutual covenant (if needed) and other transactional documents.
5. The 10% deposit to the vendor is also needed to be paid within these days.
6. The solicitor will then ask for state authority consent, and the buyer has to provide some other documents in the meantime – a copy of the SPA, foreign purchaser’s passport, and more.
7. Then it is time to pay the balance purchase price as per the rules.

Other costs :-

• Cost of Buying Property
• Cost of Owning Property

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.

How can foreigners buy at a lower price?

Foreign nationals who will stay in Malaysia for a long period of time, a 10-year visa to be specific, can get the chance of buying property at a lower price from a program named Malaysia My Second Home (MM2H). They just have to fulfill the following requirements –

• Foreigners under 50 years of age: Need to have a minimum balance of RM500, 000 in their accounts.
• Foreigners above 50 years of age: Need to have a minimum balance of RM350, 000 in their accounts.

(We have partner that assist in MM2H Application)

Buying a property is, undoubtedly, one of the most emotionally charged purchases of one’s life. In the case of foreigners, the matter can be a sensitive one as they are making a transaction far away from home. However, to be honest, Malaysia is a suitable place for purchasing or living. Just be sure to do a little research about the place and property you want to buy; the rest will be a smooth ride.

Financing with a home loan

The Margin of Finance (MOF) can go up to 80% for MM2H holders, while non-MM2H holders would generally get 70% MOF. In this matter, foreigners are usually better off taking loans from foreign banks in Malaysia. However, all these come with an exception when they are married to a Malaysian citizen. In this case, the spouse will be required to take part in loan financing to enjoy MOF as high as 90%.

Conclusion

The policies mentioned above were put in place to tackle the ballooning property price in major cities. Other than that, Malaysia is still a foreigner-friendly country with relatively cheap living costs. Make sure you are fully prepared with your funds and don’t forget to mingle with the multi-racial community here in Malaysia!

If you need personal consultation for property that meet minimum requirement property price investment, do can consult :-

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