Guidelines for foreigners buying a house in Malaysia

This article was updated on 14 October 2019. 

Are you an expat looking to call Malaysia home? Check out our guide which details the property purchasing process and information on 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 types of properties available to foreigners, the minimum purchase value imposed by state authorities and the property financing procedures in Malaysia.

1. What kind of properties can foreigners own?

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 the state authority.

Having said that, foreigners can easily own a studio unit, condominium, landed properties including terrace houses and bungalows, commercial property, industrial property, agricultural land and industrial land (except Malay Reserved Land).

It was announced under the recently tabled Budget 2020, that the government will be lowering the price threshold for foreign property ownership from RM1 million to RM600k in urban areas, beginning January 2020. However, this only applies to unsold, existing stock in the condominiums and apartments categories. Property projects that have yet to be launched will not qualify for this treatment. The complete details on which neighbourhoods qualify as “urban areas” have yet to be confirmed by the government –  we will be updating this article as soon as we get wind of it.

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


Keep in mind to plan your finances thoroughly before you decide to take up the sizeable burden of a home loan. © xb100 | Freepik

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.

3. Procedures for acquiring property by a foreigner 

*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 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 purchaser. 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.

READ: How to be a Permanent Resident (PR) in Malaysia?

4. What are the costs involved?

A. Stamp Duties

Stamp duty rates for properties valued more than RM1 million will be increased from 3% to 4% from January 1, 2019 onwards.

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).

B. Legal Fees

C. Real Property Gains Tax (RPGT)

This may not be a purchasing cost, but foreigners 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.

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

foreigner buy house

© 123RF

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.

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 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

NOTE: In the state of Selangor, foreign purchasers 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

MORE: 8 things foreigners should know about 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, foreigners 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.


© Pixabay

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 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!

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