|Date: 3 December 2019||Published by: IBN|
What are the guidelines for foreigners purchasing a house in Malaysia?
According to the laws of Malaysia, foreigners can own any type of property, including studio unit, condominium unit, landed properties including terrace houses and bungalows, commercial property, industrial property, agricultural land and industrial land (except Malay Reserved Land) with the exception of:
|1.||Properties valued less than RM1 million;|
|2.||Low and medium cost residential units as defined by the state authority;|
|3.||Properties built on Malay Reserved land, and;|
|4.||Properties distributed to Bumiputera interest in any development project as determined by the Malaysia government.|
In Malaysia, each state has a different minimum property price threshold and the state authorities remain in power to amend the threshold value. Foreigners can freely purchase an unlimited amount of properties in Malaysia as long as the above requirements are met. There is currently no tax for property inheritance in Malaysia, which allows the properties to pass down through generations easily.
Procedure for foreigners purchasing a house in Malaysia
|1.||Sign the developer’s letter of intent to purchase and pay 1% of the total house price as deposit.|
|2.||Sign the Sales & Purchase Agreement and other transactional documents with the developer within 14 days after signing the letter of intent to purchase. Purchaser also needs to pay the remaining deposit.|
|3.||Pay the balance purchase price in accordance with the Third Schedule of Schedule H Housing Development (“Schedule H”) or the SPA.|
|4.||Apply for financing to purchase the property (if necessary).|
|5.||Loan tenure starts after delivery of vacant possession.|
|6.||Stamp duty is required for all SPA and will be verified by the developer.|
|7.||The transfer of property ownership must be done at the land registry.|
During the process of purchasing a house in Malaysia, a lawyer will be present to witness the signing of SPA. All SPA will be prepared in English language. However, the lawyer is fluent in Chinese and English and will be able to provide detailed explanation on the terms and conditions listed within the agreement.