Guidelines for foreigners buying a property in Malaysia


*This article was updated on 26 July 2020. 

Are you an expat looking to call Malaysia home? Check out our property guide which details the foreign ownership process, costs involved and information on Malaysia My Second Home (MM2H).


© swissmediavision | Getty Images

Over the past decade, quite a few expatriates in Malaysia have opted to purchase a residential property either as a second home or for retirement purposes.

If you are looking to do the same, you would need to understand certain policies and legal fees imposed by the government. This article serves to guide you through the type of properties available to foreigners, the minimum purchase price imposed by state authorities and the property financing procedures in Malaysia.

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1. Are foreigners allowed to buy property in Malaysia?

Foreign ownership of property is liberal (foreigners can even own 100% of the property) in Malaysia as long as minimum requirements are met. In law, foreigners can own any type of properties with the exception of:

  1. Properties valued less than RM1 million in most of the major states.
  2. Properties built on Malay Reserved land
  3. Low and medium cost residential units as defined by the state authority
  4. Properties distributed to Bumiputera interest in any development project as determined by state authorities.

Having said that, foreigners can easily own a studio unit, condominium unit, landed properties including terrace houses and bungalows, commercial property, industrial property and industrial land (except Malay Reserved Land). According to the National land Code 1965, foreigners are not allowed to purchase agricultural land – but in respect of building land or agricultural land gazetted for development, they may do so after receiving the consent from the relevant state authority.

2. What is the minimum Malaysia property purchase price for foreigners in each state?

Generally speaking, a minimum value of RM1 million is applied to all kinds of property in almost every state, except for 4 (refer to the third table below). However, the respective state authorities remain in power to amend the minimum value.

liza5450 | 123rf

2020 Updates for foreigners buying a property in Malaysia

During the tabling of Budget 2020, Finance Minister Lim Guan Eng announced that the government will be lowering the price threshold for foreign property ownership from RM1 million to RM600k in urban areas, beginning January 2020. But, this only applies to unsold units and existing stock in the condominium and apartment categories. Property projects that have yet to be launched will not qualify for this treatment. Nevertheless, since land is a state matter in Peninsular Malaysia, it depends entirely on the respective state governments if they would want to lower the property price thresholds for foreigners.

Minimum Selangor property purchase price for foreigners 2020

On January 24 2020, the Chief Minister of Selangor, Datuk Seri Amirudin Shari said that the state government is reducing the price threshold for strata properties, including strata landed homes to RM1.5 million from RM2 million previously, effective Jan 1, 2020. This new ruling is for overhang units (located in Zone1 and 2) that have received a certificate of completion and compliance as at 2018 and have a leasehold title.

Minimum Penang property purchase price for foreigners 2020

Penang has also revised its minimum purchase price in June 2020 – foreigners can now buy stratified properties priced at RM800,000 (previously it must exceed RM1 million) in the island and RM400,000 (previously it must exceed RM500,000) in the mainland.

Meanwhile, for landed properties, the minimum price is now RM1.8 million (island) and RM750,000 (mainland). Before this, foreigners were not allowed to buy landed properties priced less than RM3 million on the island and RM1 million on the mainland.

This new property price threshold for foreigners applies only for overhang units and is valid for 1 year, starting from June 11 2020.

Minimum Negeri Sembilan property purchase price for foreigners 2020

This southern state has reduced its RM2 million price threshold in June 2020 – foreigners can now purchase a landed home (included landed strata) from RM1 million. Foreigners and foreign companies will also be able to buy high-rise strata property with prices exceeding RM600,000.

Minimum Sabah property purchase price for foreigners 2020

In Sabah, foreigners will be allowed to purchase overhang residential properties priced from RM750,0000 onwards. The previous threshold was capped at RM1 million.

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3. Procedures for foreigners buying a property in Malaysia

*Sourced from PW Tan Associates

1. Sign the developer’s sales form or the offer to purchase form with the vendor, for sub-sale transactions.

2. Apply for financing to purchase the property (if necessary)

3Provide 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).

4. Within 14 days from the date of signing of the sales form (or offer to purchase), sign the Sales & Purchase Agreement (SPA), deed of the mutual covenant (if applicable) and other transactional documents. Pay the 10% deposit to the developer/vendor.

5. 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

6. 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.

7. 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 buyer. In the case of a sub-sale transaction, the vendor shall deliver vacant possession to the purchaser in accordance with the terms of the SPA.

4. How much do you need to buy a house in Malaysia?

Stamp Duty

PRICE TIER STAMP DUTY (% of property price)
First RM100,000 1%
Next 400,000 (RM101,000 – RM500,000) 2%
The following amount up to RM1 million(RM500,001 – RM 1 million) 3%
Thereafter (> RM 1 million) 4%

Stamp duty rates for properties valued more than RM1 million was increased from 3% to 4% as of January 1, 2019. 

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. Comparatively, under the old rate of 3%, a purchaser would have to pay RM39,000 (3% X RM1 million).

Legal Fees (For SPA & Loan Agreement)

Value of property (RM) LEGAL FEE (% of property price)
First RM500,000 1% (subject to min fee of RM500)
Next 500,000 (RM500,001 – RM 1 million) 0.8%
Following RM2,000,000 (RM1,000,001 – RM 3 million) 0.7%
Next RM2,000,000 (RM3,000,001 – RM 5 million) 0.6%
Thereafter (> RM 5 million) 0.5%
Where the adjudicated value exceeds RM7.5 million Negotiable (will not exceed 0.5%)

Real Property Gains Tax (RPGT)

This may not be a purchasing cost, but foreign buyers should take note of the recently-announced government proposal from Budget 2019 where Real Property Gains Tax (RPGT) will be increased from 5% to 10% (in the sixth year onwards) for disposals of properties by foreigners. Should foreigners sell a property within the first five years of owning it, they would be liable to pay RPGT at 30% of the chargeable gain.

CHECK OUT: What is Real Property Gains Tax (RPGT) in Malaysia & How to calculate it?

5. How foreigners can buy homes at a lower price?

Malaysia My Second Home (MM2H) is a programme tailored for foreigners who wish to stay in Malaysia for a long period of time (10-year visa). Quite a few expats who have worked in Malaysia for a number of years have applied for MM2H as they wish to retire here.

foreigner buy house

© 123RF

Before putting in an application, foreigners below 50 years of age are required to prepare a minimum of RM500,000 in their Savings Account / Current Account / Fixed Deposit whereas those aged above 50 years of age need to have at least RM350,000 in similar accounts.

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 properties foreigners can buy with and without MM2H:

Selangor RM2 million (for Zones 1 & 2)

*RM 1.5 million for strata properties (overhang units in Zones 1 & 2)

RM1 million (for Zone 3)

RM2 million (for Zones 1 & 2)

RM1 million (for Zone 3)

Terengganu, Pahang, WPKL, Putrajaya RM1 million RM1 million
Johor RM2 million (landed property in international zones)

RM1 million (strata title & landed property within non-international zones, except for Medini)

RM 1 million
Negeri Sembilan RM1 million (overhang landed property)

RM600,000 (overhang high-rise property)

RM 1 million
Kelantan  RM1 million RM500,000
Perak RM1 million RM350,000
Sabah RM750,000 (overhang units) RM500,000
Kedah RM600,000 (Kedah)

RM1 million (Langkawi)

No minimum
Perlis RM500,000 RM1 million
Sarawak RM500,000 RM300,000
Penang Overhang Landed property: RM1.8 million (island)
RM750,000 (mainland)Overhang Strata properties: RM800,000 (island)
RM400,000 (mainland)
Malacca RM1 million (landed title)

RM500,000 (strata title)

RM1 million (landed title)

RM500,000 (strata title)

*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

NOTE: In the state of Selangor, foreign buyers are prohibited from:
1. Purchasing landed residential properties unless said property is issued with a landed strata title (e.g. gated community). 
2. Buying auction properties
3. Purchasing agricultural land

CHECK OUT: The Complete Guide to Gated & Guarded Communities in Malaysia

6. What are the home loan financing options?

The Margin of Finance (MOF) can go up to 80% for MM2H holders, while the rest would generally obtain a 70% MOF. In this matter, foreign buyers are usually better off taking loans from foreign banks in Malaysia. However, should a foreigner be married to a Malaysian citizen, the spouse will be required to take part in the loan financing to enjoy a Margin of Finance as high as 90%.

Find a suitable home loan that meets your requirements in Malaysia.

I’m a Singaporean / Singaporean PR and I own an HDB flat, can I buy private residential properties in Malaysia?

According to HDB InfoWEB, those who own HDB flat can only buy both local and overseas private residential properties after 5 years since first possessing the flat, regardless of whether the flat is being transferred to others within the period. This is known as minimum-occupation-period (MOP).


The policies mentioned above were put in place to tackle the ballooning property prices 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!

*This article was repurposed from “Buying property in Malaysia as a foreigner“, first published on


💰 There’s tax incentive for landlords. Check out the rates for expatriates & non-residents.
🙅‍♂️ Not interested in buying? Then refer to this guide for foreigners looking to rent in Malaysia
🚪 Don’t forget to check out these tips before you rent a house in Malaysia

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