buy property malaysia

For several years now, Malaysia has been an investment hotspot for foreigners. Expats from all over the world highly consider investing their money in Malaysia’s real estate. Compared with its neighbouring countries, properties in Malaysia are more affordable and have lower tax rates. Foreigners who want to buy a property in Malaysia should be aware of some regulations so they can avoid the many pitfalls that most property buyers get into.

Buy Property in Malaysia as a Foreigner

Owning a property in Malaysia is quite liberal. Foreigners can completely own the property as long as they meet the minimum requirements. By law, foreigners are allowed to own any type of property in Malaysia except for: 

  1. Real estate less than RM1 million
  2. Malay Reserved land properties
  3. Low and medium cost residential homes
  4. Bumiputera interest in any development project

Malaysia has 13 different types of properties that foreigners can avail of. This includes: 

  • Apartments
  • Bungalows
  • Condominiums
  • Flats
  • Freehold Lands
  • Leasehold Lands for Commercial Purposes
  • Penthouses
  • Small Office Home Office (SOHO)
  • Terraced Houses
  • Semi-Detached Houses
  • Small Office Flexible Office (SOFO)
  • Town Houses
  • Small Office Versatile Office (SOVO)

Malaysia also has three different titles used for the properties and these are:

Master Title. This title is granted when the property is under development. The developer has full control of land rights. 

Strata Title. This title is given to a property owner who purchases a property located in a shared building. The most common examples are apartments and condominiums. 

Individual Title. This title is given to a property owner who owns both land and structure as in semi-detached homes and bungalows. 

Note that properties also get a commercial title if it is used as an office. 

MM2H Visa Holders

MM2H is a 10-year Malaysian visa programme for foreigners which allows them to invest in a property at a more affordable price. Expats who are thinking of retiring and residing in Malaysia will fall under this category. Many foreigners avail of this programme because the margin of financing on properties are better and higher. Compared with regular visa for foreigners, MM2H visa holders have different minimum price threshold. 

  • Kedah: no minimum price rate
  • Sarawak: RM 300,000
  • Perak: RM 350,000
  • Penang Mainland: RM 500,000
  • Penang Island: RM 500,000

Minimum Purchase Threshold

As mentioned, foreigners can buy properties if they meet certain criteria set by the Malaysian government. Aside from the purchase threshold, foreigners younger than 50 years old should have at least RM 500,000 in the bank account. For those aged 50 years old above, their savings account should have at least RM 350,000.

The minimum purchase threshold set for foreigners in different states are as follows:

  • Kelantan: RM 500,000
  • Labuan: RM 1 million
  • Johor: RM 1 million
  • Kuala Lumpur: RM 1 million
  • Perlis: RM 1 million
  • Melaka: RM 1 million
  • Penang Mainland: RM 2 million
  • Penang Island: RM 2 million

Financing for Foreign Property Buyers

MM2H holders have a margin of finance (MOF) which can go up to 80% whilst those that do not have would typically get only 70%. In this regard, foreigners often consider taking up a loan from foreign banks in the country. Foreigners married to a Malaysian citizen can increase the MOF up to 90% as the spouse will also take part in the financing. 

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