Procurement of Property in Malaysia



First and foremost, Malaysian property is still super affordable. Regardless the high growth over the last two decades as mentioned by FIABCI president Ir Yeow Thit Sang, “Today, prices are two to three times more than what it was in 2003, and the percentage of young buyers has dipped some 20 percent as salaries don’t commensurate with property costs,” the fact that Malaysia is an affordable place to invest still remains; primely because the buying costs are still relatively low at circa 4-5% compared to Singapore, Thailand, Australia or the UK. In the right places, you can get an advantage value for money since the Ringgit currency is relatively weak at the moment. The RPGT (Real Property Gain Tax) that was imposed by the Malaysian government for the capital gains tax on the sale of property is also comparatively low compared to other countries in the region especially if you hold the property for more than 5 years.

Other than that, there is also the matter of location factor. As the mantra saying goes, “Location, location, location,” location truly plays a huge role in buying property as its price and potential growth depends on it. In Malaysia, the price of the property is according to per m². A good location means a good place to live and convenient for you to commute to your workplace -whether your location is within easy reach of amenities, public transport, universities and offices area is a bonus point for you. These landmarks are what mostly the benchmark to take into account to determine the price of your property as well as how much you can charge for rent. Soam, the Deputy President of the Real Estate and Housing Developers’ Association (REHDA), make a remark that the costs of homes in more mature locations like Kuala Lumpur is much higher, with average house prices around MYR 772,126 (US$ 173,902) in 2016, compared to the less developed and lower incomes states like Perlis since the land price there is the cheapest with an average price of MYR 153,472 (US$ 34,566). Therefore, the national average house price was MYR 334,736 (US$ 75,390.82) in 2016 (according to JPPH –National Property Information Centre). Moreover, the competition of the local property market is much more zealous nowadays with the attractive prices to offer, competitive rates and avant-garde architecture and design that live up beyond anyone’s expectations.


Either you are local or foreigner, you need to understand certain policies and legal fees imposed by the Malaysian government on property purchases. Malaysia has their own lingo of its own right which what makes it different from other countries property buying. The trick to understand this ‘whole new lingo’ lies within what may be called as property title. Malaysia operates under the Torrens title system of land registration, which is considered common amongst most commonwealth nations including Australia and Singapore. However, in Malaysia, you’ll need to be alert of these three types of title:

  • Master Title: This title refers to the ‘top-level’ property developer which enable them the full control and rights over land they own. Typically, you’ll be referred to master title when new properties are being constructed, before individual or strata titles are granted.
  • Strata Title: A property owner who buys a property in a shared building (i.e. condominium) will be granted this title.
  • Individual Title: This title has almost the same function as Strata Title except the fact that it is granted to the property owner who has a discrete piece of land or also known as landed properties like houses, bungalows, semi-detached and etc.

On the other hand, there is also another thing that you wouldn’t want to miss on your account – the miscellaneous fees and charges for stamp duty (or memorandum of transfer) and other legal charges. For just this purpose, you’ll need to have several thousand more ringgit included in your financial planning.


First of all, the most important thing foreigners always ask when they want to buy property in Malaysia: Do foreigners need approval for buying properties in Malaysia? The answer to the question is, “Yes.” Foreigners, in fact need the State approval first before acquiring the property.

In addition, there is a certain condition that foreigners must know and abide before buying property in Malaysia. Foreign ownership of property is liberal in Malaysia. Foreigners can even own 100% of the property as long as minimum requirements are met. As the law stated, foreigners can own any type of properties with certain a condition met:

  • Since 2014, the minimum property purchase price that Malaysian government has imposed on foreign buyers is MYR 1 million (or about USD 225, 000 as of current currency).
  • However, States have the ability to overrule the Federal minimum of MYR 1 million by imposing their own buying restrictions – so you’ll find that the limits might differ according to different States in Malaysia.

It may sound strict to some people, but Malaysian regulation also has their own lenient side. For example, Malaysia government has imposed the MM2H programme, alias Malaysia My Second Home that has been tailored specially for foreigners. In this programme, foreigners are entitled to buy property at a lower price if they have the requirements met. The most basic requirements are:

  • For foreigners who are below 50 years old, they are required to prepare a minimum of MYR 500,000 in Saving Account/ Current Account/ Fixed Deposit;
  • Whereas those who aged above 50 years old need to have at least MYR 350,000 in Saving Account/ Current Account/ Fixed Deposit.

This programme allows foreigners and their family to live on a long-stay visa in Malaysia for up to 10 years. It comes with privileges such as tax-fee remittance of foreign income, ability to import a car, ability to bring a domestic helper and the list goes on. Click here [] if you want to know more about MM2H visa.

Nevertheless, do take note that there are some properties in some part of Malaysia that foreigners are not allowed to purchase. The lists are as following:

  • Malay Reserve Land – This land is an exclusive land for only Malays people.
  • Bumi Lots – This title is always confused with Malay Reserve Land. Bumi Lots are units of land or property, which can only be purchased and owned by Bumiputeras.Even though there are some rare cases for non-Bumis to be able to purchase the units, foreigners are strictly off-limits.
  • Low to Medium Cost Properties – The States authority determined that purchasing the low to medium cost housing is prohibited to foreigners. This property and the Bumi Lots aren’t always easy to identify, therefore be sure to do some homework on the differences between these property types.
  • Agricultural Land – Most agricultural in Malaysia is off-bounds to Foreigners.

All in all, here is a gentle reminder for the future buyers:

“Buyers may not fully protected against default, an issue vigorously raised by the Malaysian House Buyers’ Association, which has pointed to flaws in The Housing Development (Control & Licensing) Act 2001, and the Strata Titles Act. Those buying unfinished property from developers should ensure that the developer has a valid Developer’s License and a valid Sales & Advertising permit.”

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