Are you an expat looking to call Malaysia home? Check out our guide which details the property purchasing process and info on MM2H.
Foreigners in Malaysia are either expatriates or tourists and thus have been received with warm welcomes when visiting our country. The government have been encouraging foreigners to opt to make Malaysia their second home too, whether for long-term stay, retirement or investment purposes.
Before making any decisions, you would need to understand certain policies and legal fees imposed by the government. This article serves to guide you through the properties available to foreigners, the minimum purchase value imposed by state authorities, and the property financing in Malaysia.
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:
- 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.
Having said that, foreigners can easily own a terrace house, bungalow, landed property, studio unit, condominium, commercial property, industrial property, agricultural land and industrial land (except Malay Reserved Land).
Read “Property Investment Landed or High Rise” to understand more before buying a property.
What is the minimum property purchase price?
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.
Procedures for acquiring a property by a foreigner
The costs involved – Stamp duty & Legal fees
How can foreigners purchase 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.
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:
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
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 an MOF 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 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!