1. Buying Property in Malaysiali>

Of late there has been talks of the Malaysian government toying with the idea of doubling the entry price at which foreigners can buy property in the country from RM500,000 (about £100,000) to RM1 million. The new rules have not yet been implemented, and so currently it is relatively cheap to buy a house or apartment in Malaysia.

There are several reasons why foreign nationals choose Malaysia as their investment and retirement destination. The climate is pleasant, returns on property investment are good, there is a wide range of properties available and above that, the country has very expat-friendly laws. Except for some parts of Malaysia, where land can only be bought and sold by Bumiputera (Malays and other indigenous groups), foreign nationals can easily own a property here.

Additionally, with the Malaysia My Second Home programme (MM2H), the government is also encouraging retirees to come to the country and invest in real estate. The process for buying property in Malaysia is straightforward and well-established, although it is highly recommended that you have appropriate legal representation from a legal expert or lawyer who can guide you through the process. Foreign nationals intending to purchase a property in Malaysia needs to obtain the respective state’s consent. In most cases, your lawyer (if you hire one) will submit this application on your behalf.

Once you have decided on the location and subsequently on a property, the standard procedure for purchasing a property is:

(i) Sign letter of offer and pay 3% of purchase price as earnest deposit
(ii) After 14 days, sign the sale and purchase agreement and pay 7% of the purchase price
(iii) Pay balance of purchase price within three months.

The entire process of transferring the funds and the necessary paperwork should be completed within three months of the initial agreement.

In Malaysia, all transfer of property is subject to Government Stamp Duty. The rate of Stamp Duty is based on the value of property, which is:
1% on the first RM100,000
2% on the next RM400,000
3% on the next RM1,500,000.

There are certain restrictions in Malaysia for foreign nationals buying a property in the country. Foreign nationals are not allowed to acquire:
(i) Properties valued less than RM500,000 per unit
(ii) Residential units under the category of low and low-medium cost as determined by the State Authority
(iii) Properties built on Malay reserved land; and
(iv) Properties allocated to Bumiputera interest in any property development project as determined by the State Authority.


The Malaysia My Second Home programme (MM2H) is a plan to encourage foreign nationals to spend time in Malaysia as a retirement destination or to just stay for extended days, with preferential treatment given to them. Applicants are allowed to bring their spouses and unmarried children below the age of 21 as dependents. The best part about the programme is that one can apply directly without any agent’s help. The procedure of property transaction is the same as usual.

This programme is targeted towards people who are more than 50 years of age. They are to show proof of liquid asset of RM350,000 and an offshore income of RM10,000 per month, or same amount of pension from government approved fund for the retired group. If no proof of income can be shown, they must maintain fixed deposits throughout the tenure of the programme, which is RM150,000 for the first year, then RM100,000 for every year onwards.

For those who are below 50 years old and wish to participate this programme, the requirements are higher. They need to place a deposit of RM 300,000 for the first year, and RM150,000 for second year onwards until they end their tenure. The deposit can only be withdrawn for the purpose of house purchase, children’s education in Malaysia or medical purposes. However, the deposits that foreigners need to maintain for the first year can be reduced to RM150,000 and RM 100,000 for below and above 50 respectively, if they own the title of a fully paid of any property worth RM1 Million.

In addition to the benefits stated above, buying a property under the MM2H programme entitles to the following benefits in Malaysia:

  • A foreigner may get loan up to 80 percent (normally for foreigner is 60 percent)
  • 100 percent registered as owner of property
  • Upon selling, there is no Capital Gain Tax.

Procedure for buying a property under MM2H:

  • Identify the property in which the participant intends to acquire
  • Buy properties that have been issued the Certificate of Fitness (CF)
  • Seek information on the property from relevant authorities
  • Assign a lawyer and get the Sale and Purchase Agreement signed

Documents required to buy a property under MM2H:
The documents required to buy a property in Malaysia under this programme is more or less the same as those required to buy any property by a foreign national but not under this scheme. These documents include:

  • Details of the property that is desired
  • Attach copy of Sale and Purchase Agreement, master title/strata title, passport or I/C or/and relevant documents deemed necessary
  • A covering letter stating the details of the property.

Starting July 12, 2012, all MM2H applications must submit bank account statements that show the latest 3 months deposit for monthly income (either from salary/ rental/ interest earned/ shares/ etc) or government-approved pensions into the applicant’s bank accounts. MM2H applications before that are not subjected to this requirement.

Interested to know more ?? just contact me : Monika Yayang +65 81 265 165

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