What Should You Know About Buying Property in Malaysia?

If you’re someone looking to buy property overseas, Malaysia is one of the best places to consider. Its property ownership regulations are quite favorable towards foreign investors, and in addition, it’s a lovely country. It has great local cuisine, lush natural landscapes and high quality of life for a lower cost. 

On top of the fact that the Malaysian government recently reduced the minimum price threshold for foreign property purchases (from RM1 million to RM600,000), it’s little wonder why many Singaporeans consider buying property in Malaysia.

Do also check out our Malaysian counterpart’s comprehensive guide: Foreigners Buying Property In Malaysia: Your Complete Guide!

Can Singaporeans Buy Property in Malaysia?

Yes, you can. It goes without saying that any foreigners can buy property in Malaysia, with the biggest consideration being where. This is because different states in Malaysia are governed by different foreign property ownership limits. 

You can own land as well – Malaysia is one of the only countries where you don’t need to be a citizen to buy land on a freehold basis. 

Compared to its neighbours, it’s relatively easy to have direct ownership of land and property. For example, in Thailand, you’d have to take multiple steps, involving contracts and third parties, only to own the land indirectly. 

Buying Property in Malaysia as a Singaporean

If you’re a Singaporean citizen and own an HDB flat, you will need to meet your Minimum Occupation Period (MOP) before you can buy property in Malaysia.

Most property and land types are fair game, but you won’t be able to purchase the following as a foreigner:

• Bumi lots (Land reserved for Bumiputeras) 
• Agricultural land (Exceptions can be made if the land is over 5 acres and will be used for commercial purposes)
• Malay reserved land (Land that can only be sold exclusively to Malays)
• Property with a valuation below RM 1 million

What Kinds of Property Can I Own in Malaysia?

If you’re buying land, you can get freehold ownership that is used for commercial, industrial or residential purposes, or simply those that are vacant. 

For residential property, you can buy almost any type of house, such as condos, bungalows, terrace houses, or orchard houses. There is currently no limit to the number of residential properties you can own.

Buying property involves a lot of number crunching

Before you jump into buying a property, here are some things you should take note of first.

Malaysia My 2nd Home Visa (MM2H)

Foreigners may consider buying Malaysian properties under the Malaysia My 2nd Home (MM2H) visa, which makes property ownership more affordable for the long-term.

The MM2H is Malaysia’s version of the long term visa. This is a 10-year renewable visa which removes the hassle of having to constantly reapply for new visas. 

Due to the COVID-19 pandemic, MM2H is temporarily suspended from August 2020. However, we are optimistic that the suspension will be lifted once the situation becomes stabilized.

As with most visas, there are requirements that need to be met before you can qualify for it. The Malaysian State of Sarawak has its own variant of the MM2H program, with requirements that differ slightly.

Here are some of the rules and limitations across the states, and what MM2H can offer. 

Whether you are purchasing the property with an MM2H visa or not, standard requirements have to be met. Here are some of the information you’ll need to know before making your investment:

1. Financial Requirements

If you are below 50 years old, you need to show proof of liquid assets worth a minimum of RM500,000, and an offshore income of RM10,000 per month. 

You are also required to open a fixed deposit account with an amount of RM300,000 within Malaysia at any bank that has a local branch. International banks such as Standard Chartered and HSBC qualify as long as they have Malaysian branch offices.

For Sarawak, applicants below the age of 50 are not allowed. Exceptions can be made for individuals who are over 30 years old, provided they are either:

• Undergoing long term medical treatment in Sarawak, OR
• Have children enrolled in schools in Sarawak

You may read more about Sarawak’s requirements here.

2. Medical Reports and Insurance

You and your dependents will need to submit a medical report from a private hospital or registered clinic in Malaysia. You will also need medical insurance. You may use any insurance company you like, as long as your policies are valid in Malaysia.

3. Minimum Property Prices

While Malaysia is a favourable country for foreign investment, they do have some regulations in place to keep property affordable for locals. One such policy is the Minimum Foreign Investment Values (MFIV). This means you can only purchase property that is valued to be at least RM 1 million. MFIV will vary by state, so make sure you check what the current value is before deciding on a property.

4. Be Aware of Property Taxes

Taxes are part and parcel of any transaction involving property.

a) Stamp duty

The stamp duty increases based on the value of your property, and the buyer pays this.

These are the current stamp duties:

• First RM100,000: 1%
• RM100,001 to RM500,000: 2%
• RM500,001 to RM1,000,000: 3%
• Above RM1,000,000: 4%

b) Quit rent

This applies to landowners, and is paid to the Land Office for both leasehold and freehold property. Leased land usually includes this in the rent.

c) Assessment Tax

This is similar to property tax in other countries. This is determined by the estimated annual rental value of your property and multiplied by a rate.

d) Real Property Gains Tax (RPGT)

These rates apply to the net profit made when you sell your property. The rates will vary based on the time you hold the property, and your residential status. The current rates can be referenced from the annual budget report released by the Malaysian ministry of finance.

Where are good places to buy property in Malaysia?

So you’re ready to take the plunge and invest in some Malaysian property, but you’re not sure of the locations. We’ve narrowed down some for you to look at. Additionally, you can browse Malaysian properties for sale here.

Kuala Lumpur

Kuala Lumpur is one of the largest cities in Malaysia, and also the main business hub for many. Notably, the government is investing heavily in Kuala Lumpur’s public transport infrastructure.  While property in the central areas of Kuala Lumpur are more expensive than other parts of the country, you can get some good deals in the outskirts. Suburbs to take note of are Damansara, Bangsar and Mont Kiara.

Penang

This is Malaysia’s second largest city, which is highly popular with retirees. The island is well known for its relaxed atmosphere and beloved by expats for its food, culture and heritage. It’s also a densely populated state. The most expensive properties in Penang are located on the eastern side near Georgetown. You can also look at Banyan Balu, Gelugor, and Jelutong for more affordable options.

Johor Bahru

Lying just across the causeway, Johor Bahru is undergoing massive development, especially with the rise of megacity Iskandar. Today, it is a notable prospect for property investments. However, take note that there are some restrictions in place for certain developments in the area. One such development is Forest City – foreigners who purchase units at this development will not automatically be issued visas to live in Malaysia. 

For FAQs Related to Buying a Property in Malaysia:

Can a Singaporean own a property in Malaysia?

Yes, Malaysia welcomes foreign investors to purchase property in the country. These same rules apply for Singaporeans.

Can Singaporeans stay in Malaysia?

Singaporeans can stay in Malaysia on short-term visits of up to 30 days. 

Can Singaporeans take loan in Malaysia?

Yes, the same rules apply for both Malaysians and foreigners who intend to take up a bank loan in Malaysia.

For more property news, resources and useful content like this article, check out PropertyGuru’s guides section. 

Are you looking to buy a new home? Head to PropertyGuru to browse the top properties for sale in Singapore.  

Already found a new home? Let PropertyGuru Finance’s home finance advisors help you with financing it.