Malaysia Property Buying Guide for Foreigners
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 studio unit, condominium, landed properties including terrace houses and bungalows, commercial property, industrial property, agricultural land and industrial land (except Malay Reserved Land).
What is the minimum requirement for the property value?
Generally speaking, a minimum value of RM1,000,000 is applied to all kinds of property in every state. However, state authorities remain in power to amend the minimum value in the states that they control.
How can foreigners buy at a lower price?
Malaysia My Second Home (MM2H) programme is a programme tailored to foreigners who wish to stay in Malaysia for a long time (10-year visa). A large number of foreigners who used to work in Malaysia have already applied for this programme for their retirement in Malaysia.
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 is that MM2H gives foreigners access to the property with a lower value. For Detail, please refer below tables:
THE MINIMUM THRESHOLD FOR FOREIGN RESIDENTIAL PROPERTY PURCHASE
|Terengganu, Pahang, WPKL, Putrajaya and Negeri Sembilan||RM1 million||RM1 million|
|Selangor||RM2 million (for Zones 1 & 2); RM1 million (for Zone 3)||RM2 million (for Zones 1 & 2); RM1 million (for Zone 3)|
|Johor||RM2 million (landed property in international zones); RM1 million (strata title & landed properties within non-international zones, except for Medini)||RM 1 million|
|Kelantan & Sabah||RM1 million||RM500,000|
|Kedah||RM600,000 (Kedah); RM1 million (Langkawi)||No minimum|
|Penang||RM2 million (island); RM1 million (mainland)||RM350,000|
|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
Financing with a home loan
The Margin of Finance (MOF) can go up to 80% for MM2H holders, while non-MM2H holders would generally get 50-70% MOF (*subject to the Bank finial approval). In this matter, foreigners are usually better off taking loans from foreign banks in Malaysia. However, all these come with an exception when they are married to a Malaysian citizen. In this case, the spouse will be required to take part in loan financing to enjoy MOF as high as 90%.