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Rules and Regulations on purchasing and selling of properties in Malaysia for foreigners

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Currently the guidelines governing the acquisition of property in M’sia by foreigners are provided by the Economic Planning Unit (EPU) of the Prime Minister Department. Although the Federal Government (i.e. EPU) sets the bar, each State within the country is free to decide not to follow this as land is a state matter. For most property purchases, foreigners are not required to obtain approval from EPU but are still required to obtain approval for the acquisition of a property from the respective state authorities pursuant to the provisions of section 433B (‘Non-citizens and foreign companies may acquire, etc., land only with approval of State Authority’) of the National Land Code (NLC). A foreigner is also required to comply with the purchase price threshold set by the various state governments.

 

However, there are instances where an approval from the EPU is required and they are as follows:

  • All property acquisitions, except for residential units, that are the direct acquisition of property valued @ RM 20 million and above, resulting in the dilution in the ownership of property held by Bumiputera interest and/ or government agency; and
  • All property acquisitions, except for residential units, that are the indirect acquisition of property by other than Bumiputera interest through acquisition of shares, resulting in a change of control of the company owned by Bumiputera interest and/ or government agency having property more than 50 percent of its total assets and the said property is valued more than RM 20 million.

Generally, foreigners are not allowed to acquire the following:

  • Residential units under the category of low and low-medium cost as determined by the State Authority
  • Properties built on Malay Reserved Land; and
  • Properties allocated to Bumiputera interest in any property development project as determined by the State Authority

 

For your information for disposing a property in Malaysia, a foreigner need not obtain an approval from the authorities.

Purchase price threshold set by the various State Governments for purchase of properties by foreigners – see below. Some states have set lower limits for people holding the MM2H Visa.

 

No

State

State Levy

Date of Enforcement

Minimum Purchase Price

(specific for MM2H holder)

Minimum Purchase Price

(for Foreigners generally)

Additional remarks

1

Johor

2% of the transacted price or RM 20K (whichever is higher)

1st May 2014

RM 1 million

RM 1 million

For residential properties

2

Kuala Lumpur

Nil

1st March 2014

RM 1 million

RM 1 million

For residential, commercial and industrial properties

3

Kelantan

Nil

N/A

RM 500K

RM 500K

For residential properties

4

Kedah

Nil

N/A

N/A

RM 1 million

For residential properties

5

Labuan

Nil

1st March 2014

RM 1 million

RM 1 million

For residential, commercial and industrial properties

6

Melaka

2% of the transacted price or RM 20,000 (whichever is higher)

1st January 2014

RM 500K (Strata title)

RM 1 million (issue document of title – non-strata title)

RM 500K (Strata title)

RM 1 million (issue document of title – non-strata title)

For residential properties

7

Negeri Sembilan

Nil

1st March 2014

RM 1 million

RM 1 million

For residential properties

8

Perlis

Nil

1st March 2014

RM 1 million

RM 500K

For residential properties

9

Perak

Nil

1st March 2014

RM 350K

RM 1 million

For residential properties

10

Pahang

Nil

1st March 2014

RM 1 million

RM 1 million

For residential properties

11

Penang

3% of the transacted price

1st Feb 2014

RM 500K (limit to 2 units only)

RM 1 million (strata title on mainland)

RM 1 million (landed strata on mainland)

RM 1 million (strata title on island)

RM 2 million (landed title (non-strata title) on island)

For residential properties

12

Putrajaya

Nil

1st March 2014

RM 1 million

RM 1 million

For residential, commercial and industrial properties

13

Sabah

Nil

N/A

RM 500K

RM 500K

For residential properties

14

Sarawak

Nil

N/A

RM 300K

RM 400K

For residential properties

15

Selangor

Nil

1stSeptember 2014

 

For residential properties

RM 2 million – Zone 1 & 2 (for strata and landed strata only)

RM 1 million – Zone 3 (for strata and landed strata only)

 

 

For commercial properties

RM 3 million – zone 1,2 and 3

 

For industrial/ manufacturing properties

RM 3 million – zone 1,2 and 3

 

Zone 1 – Districts of Petaling, Gombak, Hulu Langat, Sepang and Klang

 

Zone 2 – Districts of Kuala Selangor & Kuala Langat

 

Zone 3 – Districts of Hulu Selangor and Sabak Bernam

 

For residential properties

RM 2 million – Zone 1 & 2 (for strata and landed strata only)

RM 1 million – Zone 3 (for strata and landed strata only)

 

 

For commercial properties

RM 3 million – zone 1,2 and 3

 

For industrial/ manufacturing properties

RM 3 million – zone 1,2 and 3

 

Zone 1 – Districts of Petaling, Gombak, Hulu Langat, Sepang and Klang

 

Zone 2 – Districts of Kuala Selangor & Kuala Langat

 

Zone 3 – Districts of Hulu Selangor and Sabak Bernam

Ø  For new developments, foreigners are not allowed to purchase more than 10% set aside for non-bumiputras and are not allowed to purchase properties set aside for bumiputras.

 

Ø  Foreigners in general are not allowed to purchase agricultural land, Malay Reservation Land and public auction properties.

 

Ø  Foreigners are not allowed to purchase landed (non-strata title) residential properties.

 

Ø  Specific for MM2H holders – for residential properties, they are to purchase from developer only. Can only purchase one (1) unit of residential property.

 

16

Terengganu

Nil

1st March 2014

RM 1 million

RM 1 million

For residential properties

 

Source: The Expat Property Guide, MM2H, Economic Planning Unit (EPU) of the Prime Minister’s Department, Malaysian Property Incorporated (MPI) and the various State Government Guidelines.

 

Contributed by:

My photo as at Feb 2016

CHRISTOPHER CHAN

BA (NZ), CDipAF (ACCA, UK), MBA (UK), CRS (USA), MMIEA

Registered Estate Agent & Associate Director of Hartamas Real Estate (Malaysia) Sdn Bhd