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How to extend or renew the lease on leasehold properties in Malaysia?


This extensive guide details what property owners and prospective buyers need to know about lease renewal for leasehold properties. This includes details on how to calculate the cost of premiums for lease renewal, reasons why you should or shouldn’t extend a lease, the pros and cons of purchasing a leasehold property, as well as some pro tips for investors.

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Someone who is interested in buying a residential property in Malaysia has a wide range of property types to choose from including condos, serviced residences, apartments, terraced homes, bungalows and semi-detached units. These properties will either have a leasehold land title or a freehold one.

Even if you understand the differences between leasehold and freehold homes, deciding which is the best option for you can be difficult. Leasehold properties have always gotten a bad rep, considering their many restrictions compared to a freehold properties. Some may argue that leasehold property is preferable to freehold property, especially in prime areas in Malaysia where undeveloped, freehold land is scarce. But others may disagree, despite the lower price the leasehold homes offer. Read more to get the low down on leasehold.

 1. What is a leasehold property?

When the State sells off a piece of land to an individual for a certain period of time not exceeding 999 years, the land is said to have a leasehold title. Leasehold properties/land typically have a lease tenure of 30, 60, 99 or up to a maximum of 999 years. On the other hand, an owner of a freehold property/land will own the asset in perpetuity.

Once the leasehold period expires, the land goes back to the State authority unless the property owner opts to renew the lease beforehand. When purchasing a subsale leasehold property, you will take over the existing lease held by the previous owner.

Most people automatically assume that leasehold properties are less valuable than freehold properties, and some developers frequently emphasize this fact while promoting new developments. Nevertheless, the land tenure is not the only component when determining whether a certain property is a sound investment – buyers will also have to consider the location, developer reputation/building workmanship quality, property concept as well as the growth potential of that locality potential.

2. How can I find out how many years are left on a leasehold property lease?

You will obtain a Land Title certificate as documentation of your purchase when you buy a piece of property or land. The Malaysian government issues the certificate through the Land Registry office. The Land Title, or ‘geran‘, comprises information on the land/property, such as whether it is freehold or leased as well as how many years are left on it.

Aspiring homebuyers who are conducting their due diligence now have the option to can log onto the Land Registry website and search for the property. Alternatively, you could ask your real estate agent, solicitor or mortgage lender to assist you.

More on the difference between freehold and leasehold properties ➡️ Freehold vs Leasehold title in Malaysia: What property buyers should know

3. What happens when the lease of my leasehold property expires?

One obvious worry is whether you will be able to keep a leasehold property once the lease is over. If you wait for it to expire, the property or land will revert to state ownership automatically and it will be available for purchase by anyone else. Any request for renewal at this point might be denied. If the lease has expired and you still want the land/property, you’ll need to apply for a fresh alienation which will cost almost as much as buying it again.

For this reason, you can (and should) apply for a renewal before this happens. There is no minimum period of ownership before a lease can be renewed and you should do so at least before 30 years is left. One thing to note is renewal will cost a fee and the closer the lease expiration date, the larger this cost will be.

Even if the government plans to use the area for other types of development, such as an MRT or a motorway, they will probably just limit the number of years you can renew your lease (you will typically get to choose between 30, 60 and 99 years)

4. How can I extend the lease of a leasehold property?

There are two provisions for renewal under the National Land Code:

(a)        Section 197 and Section 76 of the Code; or
(b)        Section 90A of the Code.

Section 90A of the Code, as amended by the National Land Code (Amendment) Act 2016, specifies the requirements for renewing a lease which includes applying before the lease expires and ensuring that the land use stays unchanged and is not infringed during the lease term.

© TEA/ 123RF

Technically, Sections 197 and 76 of the Code do not allow a lease to be prolonged. For this reason, you must submit applications under both provisions to the State Authority. The applicant will then be advised on which provision of the Code their application will be processed under as well as the leasehold premium due.

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What is a leasehold premium?

A premium is the full rate of coverage that homeowners must pay to maintain the property’s lease. Contrary to freehold units, leasehold properties do not carry a premium, hence it has to be renewed from time to time after a specific period has passed.

Important notes for leasehold renewal in Malaysia

  • If you own a strata-titled property, i.e a condo or serviced apartment unit, the application for lease extension has to be done by the Management Corporation (MC) or Joint Management Body (JMB) – on the authority of a unanimous resolution by all residents. This is because all owners in this building/area have an Individual title (instead of a Master title) and each owner will need to pay towards the lease renewal.
  • If you want to extend your landed leasehold property, you must apply to the state government in which the property is located.
  • It’s usually best to apply for a renewal when the lease has around 50 years left on it, as banks are becoming more hesitant to provide money, even for refinancing loans. So, especially if it’s a family house that’s been passed down, do be mindful of the remaining lease on your property.
  • The entire procedure can be between 1-2 years or longer depending on how busy the land office is.

List of documents required for lease renewal

  • The application form (Borang 12A)
  • A certified copy of the land title (which can be obtained from the office’s registration department)
  • A copy of the current year’s quit rent and assessment rates receipt 
  • Personal and land particulars,
  • Two copies of site plans
  • Two copies of your NRIC

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 5. How much does it cost to extend the lease?

Land laws in Malaysia are subject to the jurisdiction of various State Authorities, hence they vary from state to state.


In Selangor, the premium formula for the extension of leasehold land is found in the Selangor Land Rules 2003 & Selangor Quarry Rules 2003.  

It should be noted that leasehold property owners in Selangor have some rebates when it comes to renewing their lease.

  1. Leasehold property owners of 60-year-old leases will be able to convert their leases to 99 years.
  2. Under the Private Residential Ownership Scheme Pay, owners only need to pay RM1000 with the condition that the owner does not sell the property to others. Should the owner decide to sell off the property down the road, he will have to fork out the monies for the balance of the premium. However, owners are allowed to transfer the property to family members. 

You might be wondering how can option no.2 be so affordable. As explained by the Selangor Menteri Besar in 2018 – With land prices escalating yearly, the Private Residential Ownership scheme offers a financial cushion and assurance that the homeowner or the next generation will not be kicked out of their homes due to a lack of funds for premium renewal. Land renewal premiums for key locations in the Klang Valley can easily cost upwards of RM150,000.


Land held under Native Titles does not require renewal as these are held in perpetuity. Meanwhile, non-native leasehold land will hold a Country Land and these typically have a 99-year lease (implemented in the 1990s). In 2020, the Sabah state government announced that they will restore 5,878 country lease titles from a 99-year lease to the original 999-year lease, to the unanimous approval of landowners and industry stakeholders.

Those looking to restore their 99-year lease tenure can register themselves as a user in the Land Development Portal HERE.

In the menu, select “Apply to restore 999 tenure” and fill in your land title number. This will generate a form that needs to be signed and submitted to Lands and Surveys Department Headquarters or any District Land Office.


A flat-rate premium is applied in Sarawak, as shown below:

Land UseCategoryRates (RM)
ResidentialTerrace Home1,000 per unit
Semi-Detached Home3,000 per unit
Detached Home6,000 per unit

The owner will have to pay an additional 30% of the total premium if the lease extension is for a period of 99 years instead of 60 years. But, property owners in this state have an advantage – the value of present interest of land (the balance of the lease term) is not considered important. Hence, owners can renew their lease only when nearing expiry.

Sarawakians can now apply for their lease extension online via eRLL Services.

CHECK OUT: Different types of customary land in Malaysia

Cheaper cost to renew leases for leasehold properties in the future?

© yongtick88/ 123RF

Currently, in Malaysia, there have not been any strata-titled properties that are close to the 99-year lease expiry. Considering the hefty cost to renew the leases of leasehold property, the government might come up with more schemes in the future to assist property owners who are occupying that land/space as the government would not have any plans to use most of these leasehold lands. In fact, it was reported in 2020 that the Perak State government is ready to consider reducing the premium for eligible and deserving applicants.

 6. How to calculate the premium for extension of leasehold land?

As previously mentioned, it differs from one state to the next. Here we will be sharing the premium formulas for Selangor and Kuala Lumpur:

A. Selangor


1/4 x 1/100 x Market Value of Land (RM/sq ft) x (term of new lease –balance of existing lease) x Land Area

Commercial and Industrial Centers

3/4 x 1/100 x Market Value of Land (RM/sq ft) x (term of new lease – balance of existing lease) x Land Area

B. Kuala Lumpur


The formula for calculating the premium in KL can be found in the Federal Territory of Kuala Lumpur Land Rules 1995:

1/4 x 1/99 x Market Value of Land (RM/sq ft) x (term of new lease –balance of existing lease) x Land Area

*If you use land value, not on a PSF basis, then the land area is not required.
*If you use land value in terms of PSF, then you multiply PSF value with the size of the related land.

Say you own a bungalow in Kuala Lumpur, where the property land size is 2,500 sq ft, and the land value is currently RM500 per sq ft. Meanwhile, there are 50 years left on the lease. The total premium payment will be:

= 1/4 x 1/99 x RM500 x (99 years -50 years) x 2,500
= RM154,672

It is recommended that you contact your local authority to identify what is the premium rate for your property before filing for an extension. It’s vital to remember that the State Authority has complete discretion over whether or not to grant the extension.

 7. Does it make sense to extend the lease of a leasehold property?

Whenever you go through the time-consuming legal procedure of extending your lease, consider whether it’s worth the effort and money. As a general rule, if the lease is less than 90 years old, you should aim to extend it as soon as possible because:

  • The value of properties with shorter leases is lower than those with longer leases (this is particularly true if leases are below 80 years)
  • Shorter leases might make it more difficult to obtain a mortgage because lenders are concerned that the value of the property will decrease, making it less secure.
  • Shorter leases can make it more difficult to sell a property.

Another important reason is, if you plan to live in it and/or pass it on to future generations within your family, you’ll want to extend the lease to make it easier on yourself and them.

Why would I not want to extend the lease?

Depending on your circumstances, it may not be worthwhile to incur the money and inconvenience of extending your lease if:

  • You already have a long lease (almost 90 years), so there’s probably little use in extending it.
  • You’re cash-strapped and heavily encumbered by a mortgage. Lease extensions can be highly costly so make sure you can afford them first.
  • You only intend to stay in the house for a few years before moving on (unless you need to extend the lease to make it attractive to buyers)
  • You are unlikely to outlive the lease term. It’s perfectly reasonable to leave the problem to your heirs.

8. Should property investors consider a leasehold property when investing?

  • A leasehold property would be priced slightly cheaper than a freehold one, thus making investments more value for money given the lower entry cost and higher rental yields.
  • Due to the nature of its tenure, property developers tend to make their leasehold properties more attractive and equipped with extensive facilities and features.

After everything is said and done, picking between a leasehold and a freehold property is based on several variables, the most important of which is the buyer’s financial power. Although leasehold properties are not always the cheapest, buying a freehold property, especially in a convenient region of Selangor or Kuala Lumpur, might cost a lot more.

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Pros of purchasing a leasehold property

1. Cheaper property prices

Assuming two properties in a certain location are identical where one is freehold and the other is leasehold, the price of the leasehold property is most often lower simply because the market prefers freehold properties.

2. Higher rental yields

Assuming that a leasehold property is cheaper than a freehold one, the lower entry cost could mean higher rental yields although one also has to take into consideration other factors such as maintenance cost and the location.

Cons of purchasing a leasehold property

1. Property loses value as lease shortens

One disadvantage of owning a leasehold property is that its value starts to depreciate as it gets closer to the expiry of the lease.

2. Tougher property financing options

Lenders will assess the remaining term on the property lease when reviewing a home loan application for leasehold properties to verify that it is long enough to cover the loan payback duration. Banks also usually stipulate a certain minimum number of years remaining on the lease before they are willing to accept the property as collateral for financing purposes, meaning that as the property gets older the likelihood of being able to secure financing on the property diminishes. Remember that land titles aside, loan underwriting will largely depend on the value of the property and the borrower’s financial health too.

Take note that the home loan approval process for both freehold and leasehold properties is identical. When applying for financing for a leasehold property, no further paperwork is necessary.

3. Property transfer needs state consent

The other often-cited disadvantage is that the transfer of leasehold properties requires state consent and quite a bit of bureaucracy is involved. Overall, the whole process will take up to a year.

4. Even if the property is cheaper, the renewal cost may be high

The cost of extending the lease grows by around 1% of the property’s value each year after 60 years, so if the property is worth RM250,000, the charge for extending the lease will climb by about RM2,500 each year.

Overall, purchasing a home or an investment property depends on your personal circumstance and goals, and there is never a case when one option is better than the other. We hope this in-depth guide will help you make an informed decision.

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Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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Frequently Asked Questions About Extending and Renewing Lease in Malaysia

For location-specific details on lease renewal procedures, visit the official website of your state's Land Office or contact them directly for guidance and assistance.
Yes, you can hire a property consultant or lawyer to help you navigate the lease renewal process and ensure that all necessary paperwork is in order.
The processing time for lease extensions can vary. It may take several months or even longer, depending on the complexity of your case and the efficiency of the local Land Office.
Eligibility criteria may vary by state, but typically, you should be the registered owner of the property, and the property should not have any outstanding fees or issues with the Land Office.