Foreigners’ FAQ: Buying Property in Malaysia

Can I buy property in Malaysia as a foreigner?

The answer is yes. Foreigners can purchase property in Malaysia. 

Foreigners are generally allowed to own various types of properties in Malaysia; however, there are restrictions and prohibitions in place. These limitations include:

• 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.

It is important to note that there are two types of property tenure in Malaysia:

• Freehold: This means that you have indefinite ownership of the property and it can be passed on to heirs.
• Leasehold (99 years but renewable): In the case of leasehold properties, ownership is granted for a specified period usually 99 years and it can be renewed upon expiration. However, the ability to renew the lease may be subject to certain conditions.

Can foreigners invest in real estate in Malaysia?

Yes. Foreigners not only can own property in Malaysia, but also can invest in real estate. This includes residential, commercial and industrial properties. They can generate rental income and potentially benefit from property appreciation.

Can foreigners buy property in Malaysia without MM2H?

Yes, foreigners can buy property in Malaysia without participating in the Malaysia My Second Home (MM2H) program. The MM2H program is an optional initiative that offers various benefits, such as long-term visas for foreigners who wish to reside in Malaysia. However, it is not a requirement for foreign property ownership.

Foreigners can purchase property in Malaysia by following the guidelines and regulations set forth by the Malaysian authorities. These regulations may vary depending on the state, property type, and other factors. While MM2H can make the process more convenient for those wishing to live in Malaysia, it is not a mandatory prerequisite for buying property in the country.

What is the minimum investment for foreigners in Malaysia?

The minimum investment requirement for foreigners in Malaysia can vary depending on the type of property and its location. Different states or territories may have different minimum investment thresholds. In general, there is no fixed nationwide minimum investment amount for foreigners and the specific requirements are determined by state authorities.

For example, some states may have minimum purchase price thresholds for different types of properties such as residential units (landed or high-rise) and commercial properties. These thresholds can change over time and may differ between states. So it is important to check with the relevant state authorities or seek advice from local real estate professionals to understand the specific investment requirements in the area where you are interested in purchasing property.

How much is the foreign consent fee in Malaysia?

Foreign consent refers to the regulations and restrictions the Malaysian government imposes on non-citizens seeking to acquire real estate or purchase any properties within the country. An application fee of RM1,000 will be payable for each application for foreign consent transfer.

Can a non-Malaysian inherit property in Malaysia?

The answer is yes.

As per the law, if there is a will, the executor is mandated to initiate the probate process which serves as the legal means to execute the deceased person’s expressed wishes. This process is imperative for the distribution of the deceased’s property. In the absence of a written will, the beneficiaries are required to pursue a Letter of Administration (LAD) to facilitate the property’s transfer. Both these processes necessitate submission to the High Court of Malaysia.

Likewise, in accordance with Section 433B (1)(e) of the National Land Code (NLC), it is stipulated that a foreigner can own and inherit property in Malaysia only subsequent to obtaining approval from the state government. It is highly recommended to refer to the comprehensive guidelines provided for property inheritance in Malaysia, which encompass the pertinent laws and instructions for securing letters of administration.

What is the tax rate for foreigners buying property in Malaysia?

The tax rates for property purchases can vary based on their residency status:

a. Foreigners with Permanent Residence Status:

The tax rate may range from 0% to 25%, depending on the applicable tax bracket. The rate is determined by the property’s value and location.

b. Foreigners without Permanent Residence Status:

The tax rate is a fixed 25% of the property’s value.

Additionally, there is a fee of 0.5% of the total loan amount, which is calculated based on the price per square foot (psf) set by property developers. This fee is typically associated with property financing and is part of the overall costs involved in the property purchase process.

Can foreigners obtain a mortgage in Malaysia?

Yes. Foreigners can indeed qualify for home loans in Malaysia. However, the accessibility to mortgages in Malaysia is heavily contingent on several factors, including the individual’s financial standing, the purpose of the purchase and the type of property in question.

When buying a property in Malaysia as a foreigner, knowing the guidelines and regulations is like having a well-drawn map in uncharted territory. We hope this article can guide foreigners to learn basic knowledge or rules for buying properties in Malaysia. With this knowledge, you can confidently make informed decisions and start your exciting journey of property ownership in Malaysia.

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