Buying A Home In Malaysia

All purchases of properties by foreign interests, if allowed under the law, must be with the approval of the FIC regardless of value. FIC application is normally just a formality. Your solicitors handling the purchase will be able to assist you in this.

Foreign interests are permitted to purchase the following types of residential properties provided they are above RM150,000:(a) Terrace houses which are more than 2 stories, provided the houses purchased do not exceed 10% of the total number of units of each such type in a particular housing project.(b) Land/bungalow houses and semi detached houses provided the houses do not exceed 10% of the total number of units of each such type in a particular housing project. If the land purchased is further developed for investment purposes, the buyer is required to form a company, which is incorporated in Malaysia and of which at least 49% is owned by Malaysians, comprising at least 30% Bumiputera.(c) Condominium/apartment units provided that the units do not exceed 30% of the total number of units in each block.

Foreign individuals (including husband and wife) however, can only purchase up to 2 residential properties of which at least one property must be a condominium.

Notwithstanding (2) & (3) above, there is no restriction on foreigners or foreign companies buying any types of property above RM250,000 if the following conditions are satisfied

(a) Property must be purchased direct from a developer licensed in Malaysia;

(b) Property must be newly completed or at least 50% in progress; and

(c) Financing for the purchase is obtained from overseas financial institution outside Malaysia.NB : FIC approval is automatic for purchases under this paragraph.

Acquisition of a third property is deemed to be for investment purpose and can be made only through a company incorporated in Malaysia with at least 70% equity held by Malaysians with at least 30% by Bumiputera.

All properties purchased by foreign interests cannot be resold within three (3) years from the date of the Foreign Investment Committee’s approval.

Note: Please note that apart from the above FIC guidelines, each of the 13 states in Malaysia also have their own separate guidelines on ownership of properties by foreigners which may or may not be the same as the FIC guidelines. It is therefore advisable to make enquiries at the respective state land offices for guidelines specifically applicable to a particular state.

Foreigners Can Purchase

Foreigners Can Purchase Shop lots which are more than 2 stories high and priced at RM500,000 and above provided that the total units purchased do not exceed 10% of the total number of units available for such type.

Office space or commercial buildings of any value provided that the total units purchased do not exceed 20% of the total units available for such type.

For Properties Purchased Direct From Developers Only

Pay 10% deposit and sign sale and purchase agreement (“SPA”). The SPA for residential properties is a standard agreement prescribed by the government.

For residential properties, subsequent payments of between 10% -15% each are due at various prescribed stages of construction. For other types of properties, payment term varies depending on the developers.

The statutory maximum period for completion of properties is 24 months from the date of the SPA for landed residential properties and 36 months from the date of SPA for apartments and condominiums. There is no statutory completion date for other types of properties.

Purchaser can take delivery of the property upon completion subject to payment of full purchase price and other charges such as maintenance fee for road, sewerage, street lighting, landscaping and etc.

Individual title, when issued will be transferred to the purchaser’s name and a stamp duty based on fixed scale for each range of purchase price will then be payable for the transfer.

Sign a letter of intent and pay one month rental as earnest deposit. If tenant fails to take up the tenancy or fails to sign the tenancy agreement subsequently, the earnest deposit will be forfeited.

Sign the tenancy agreement and pay a further deposit equivalent to one month rental, utility deposit (usually half a month rental for residential properties) and one month advance rental. Lease periods are normally one to two years. This refundable deposit is kept by the owner as security for any damage to the property or furnishing or fittings or against unpaid rent or utility bills and is standard in Malaysia.

At the time of signing the tenancy agreement, the Tenant is required to pay the stamp duty (government tax on the agreement) on rented property. Duty is approximately 0.35% of the yearly rental for each year of lease.

Open a phone line account at the nearest Telekom office. For details, please call 603-1050.

A joint inspection of the property is held with the landlord prior to taking delivery where an inventory list is signed and agreed upon.

Take possession of the keys.

Senior citizens from any country (except Israel & Yugoslavia) who attain the age of 50 and above are allowed to stay on a long term basis. Upon application, a Visit Pass (Social) will be issued for a maximum period of five years on yearly basis. Extension of another five years may be granted on a periodical basis. The conditions to be satisfied to qualify for this programme are :

Applicant must be above 50 years old. There is no age restriction for the applicant’s spouse.

Application has to be submitted by local sponsor in Malaysia to The Immigration Head Office, Kuala Lumpur. The sponsor must be a Malaysian citizen or Permanent Resident.

If applicant needs a Visa, it should be obtained from Malaysian Representative Office abroad prior to entry into Malaysia.

Applicants with spouse must EITHER have a pension(s) or royalties or other income of not less than RM10,000.00 per month OR a savings of RM150,000 in a Malaysian bank account which must be maintained when renewing their annual visit pass.

Single applicant must EITHER have a pension or royalties or income of RM7,000 per month OR a savings of RM100,000 in a Malaysian bank account which must be maintained when renewing his/her annual visit pass.

Applicants must possess medical insurance coverage applicable in Malaysia. If insurance coverage is refused due to old age, this requirement may be waived subject to proof.

The applicant shall not participate in any profession, occupation or business activities while residing in the country. Participating in voluntary organizations in accordance with the government’s rules and regulations is however permitted.The fee for one year Visit Pass Social is RM90.00. The fee for visa will be based on the existing bilateral agreement of visa fees between the two contracting countries.

If the property is purchased direct from the developer, the developer would apply for water and electricity connection on your behalf. The relevant deposits, the connection charges and charges for water meter (for high rise residential units only) however, will have to be borne by you.

You will however, need to apply for telephone connection yourself. Just complete the form and bring it together with your passport and work permit to the nearest Telekom office. You will have a pay a deposit of around RM1,500.

For further details, please call 603-1050.

Apartment-A multi-storey building for residential purpose but with no facilities other than car park and community hall.

Bungalow-A unit that stands alone and does not share any of its external walls with other units.

Common property-The remaining portions of a sub-divided high rise property which are jointly owned by owners of all the units within the property e.g. recreational facilities and car parks (if unit is not sold together with the parking lot).

Condominium-Apartment with facilities e.g swimming pool, tennis courts and gymnasium.

Earnest Money-The deposit money given to the seller to show that he is serious about buying the house. If the sale goes through, the earnest money is applied against the purchase price. If the sale does not go through, the earnest money will be forfeited.

Freehold-A title which is valid for perpetuity.

Fully furnished-The owner must provide all furniture to allow tenant to live comfortably.

Landed-A property with land, can be a bungalow, semi-detached or terrace house.

Leasehold-A title which has a maximum validity of 99 years from the date of issue.

Management Corporation- A corporate body, established under the Strata Titles Act 1985, which consists of all the owners of the units in a high rise property. The Management Corporation controls and manages the common property.

Partially furnished-Some basic essential items such as wardrobe, kitchen cabinet and curtain are included.

Semi detached-A unit that shares one side of its external wall with another unit.

Short term lease-A lease which is less than 3 years.

Strata Title-A separate title issued for each unit within a high rise building.

Terrace house-A house that shares both sides of external walls with other units (except for end unit where only one side of its external wall is shared with another unit).

Unfurnished-No furniture included. However the owner would normally be expected to include lights.

Walk-up Apartment-Apartment with no lifts.