Legal Article : Guidelines – Can Foreigners Buy Property in Malaysia?

Foreigners may purchase property in Malaysia subject to the following guidelines:-

What is the minimum property purchase price for foreigners?

Compared to other Asian countries, Malaysia’s selling price of properties is considered reasonable, particularly when it comes to properties located in the city. The nearest example is Singapore, which has strict regulations in terms of property purchase and the high selling price of properties.

Foreigners can purchase property in Malaysia, including purchasing of commercial and landed homes. This year however has seen some changes in the regulations and policies in respect of minimum purchase price of properties which foreigners are eligible to purchase and own.

In October 2013, the Federal Government raised the minimum purchase price of property to RM1 million effective 1st January 2014. Nonetheless, you may want to know that as this is a policy, and not  a law fully passed and effective throughout Malaysia, the various individual states have the discretion and power to overrule the Federal policies. As such, different states may have different rulings in respect of minimum property purchase price. You may also want to note that the State Approval can take months to obtain, depending on the land office back-log and which state the property sits in.

It has been announced that as of 1st September 2014, the Selangor Land Office has changed the minimum purchase price for foreigners to RM2 million. This is only applicable to Selangor where foreigners can’t buy landed properties in Selangor unless it’s in a gated community, which has a Landed Strata title. Foreigners will now have to pay double the amount to purchase property in the following districts:

-Hulu Langat
-Kuala Selangor
-Kuala Langat

As of 1 July 2012, MM2H participants can only purchase a residential property at a minimum of Rm500,000  and this is limited to 2 units only. For foreigners there is no limit in units to purchasing a landed property on the Island (minimum RM2 million) and in Seberang Perai (minimum RM1 million). For properties with Strata Title, it is a minimum of Rm1 million for Seberang Perai and on the Island.

Rules and Regulations for Purchasing Property in Malaysia

Malaysia property laws and regulations are governed under the various State Governments, so rules can vary depending on which part of Malaysia the property is located. Although the Federal Government passes national regulations, the States have the option of implementing these or not when it comes to property matters. One example is setting the minimum price at which foreigners can buy property, where the Federal Government raised the price and initially some States chose not to follow.

Legal Fees for Malaysian Property Transactions

Value of property Rate
1st RM150,000 1.00%
Next RM850,000 0.70%
Next RM2,000,000 0.60%
Next RM2,000,000 0.50%
Next RM2,000,000 0.40%
Over RM7,500,000 (negotiable) >0.40%

Property Titles

There are two categories of titles in Malaysia available for foreigners. Freehold (which gives the owner full, permanent ownership of the property) and leasehold (which allows the owner to stay in possession for a limited period). Most leaseholds titles are originally for 99 years and can be extended on paying a further sum.

A house receives a “title” once completed and an apartment or condominium is given a “strata title”. In the case of new apartment buildings, the strata title may not be issued for some time after the building is completed.


Sale & Purchase Agreement

The purchase agreement for a property is called the “Sale & Purchase Agreement”. If you are purchasing a property second or subsequent hand(s) which is also known as a sub-sale transaction, it is best to consult a lawyer to look after your interests and handling the transaction for you as a sub-sale Sale & Purchase Agreement may be varied depending on the situation of the case. If you are buying directly from a developer, then the Housing Development (Control & Licensing) Act will sufficiently protect your interests.

State Approvals

***Kindly note that state consent can often take six months and in some cases longer.

Foreigners are no longer required to obtain Foreign Investment Committee (FIC) approval but are required to obtain approval from the State Authorities. Several factors will be taken into consideration such as:-

– the location of the property;

– the type of property in question;

– the type of development in question;

– the percentage of total units sold owned by foreigners.

Malaysia My Second Home Visa Holders

For foreigners who are planning to move here under the Malaysia My Second Home programme, you will be eligible to make a lower Fixed Deposit if you have already, prior to applying for the MM2H visa, purchased a property in Malaysia with the purchase price of over RM1 million and the property does not have any encumbrances. If you make a purchase a property after obtaining the MM2H visa, then you can withdraw your monies from the Fixed Deposit after 12 months to account for the property purchase by showing evidence that you have purchased and paid for a house in Malaysia. Should you purchase a property after obtaining the MM2H Visa, the value of the property is not relevant and you may apply for a loan to finance the property as long as the cash amount you have paid exceeds the amount you wish to withdraw from your Fixed Deposit.

4 responses to “Legal Article : Guidelines – Can Foreigners Buy Property in Malaysia?

  1. Badariah Rafei

    I am a Malaysian citizen. My husband is however an Australian citizen. We would like to inquire if it would be possible for us to buy a unit or house in Penang, Malaysia in both names? Are we bound by the RM1 million rule? Kindly advise. Thanking you in advance for your kind cooperation.


  2. Hasnah Mohamed Samidin

    Will the Selangor State governent allow for exemption for the min RM2million rule for foreigners?


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