18 Aug What kind of properties can foreigners own in Malaysia?
If you are a foreigner and you are interested to buy a house to stay in Malaysia or as an investment, there are a few things to take note such as the minimum threshold of purchase price, the types of properties, foreigner consent application, and Real Property Gain Tax (RPGT) application on Foreigners.
Below is a table for your easy reference on the types of properties and the minimum threshold:
| State | The minimum threshold for foreign residential property purchase | With MM2H |
|---|---|---|
| WP Kuala Lumpur, Putrajaya, Terengganu, Pahang, and Negeri Sembilan | RM 1 million | RM 1 million |
| Selangor
Zone 1 – Districts of Petaling, Gombak, Hulu Langat, Sepang and Klang |
RM 2 million (for Zones 1 & 2) RM 1 million (for Zone 3) |
RM 2 million (for Zones 1 & 2) RM 1 million (for Zone 3) |
| Johor | RM 2 million (landed property in international zones) RM 1 million (strata title & landed properties within non-international zones, except for Medini) |
RM 1 million |
| Penang | RM 2 million (island) RM 1 million (mainland) |
RM 350,000 |
| Malacca | RM 1 million (landed title) RM 500,000 (strata title) |
RM 1 million (landed title) RM 500,000 (strata title) |
| Kelantan & Sabah | RM 1 million | RM 500,000 |
| Perak | RM 1 million | RM 350,000 |
| Kedah | RM600,000 (Kedah) RM1 million (Langkawi) |
No minimum |
| Perlis | RM500,000 | RM 1 million |
| Sarawak | RM 500,000 | RM 300,000 |
*Strata titles in Malaysia relate to properties where multiple units are built as part of a shared development with shared amenities. In most cases that means apartments or condominiums;
Landed property means property where a unit is developed as part of a private parcel, with no shared ownership responsibility, with an individual property title. That often means a bungalow, semi-detached, or terraced house.
Foreigner Consent Application
Other than the two requirements as stated above, a foreigner who intends to purchase a property in Malaysia is also required to apply for the State Authority Consent. This is pursuant to the provisions under Section 433B of National Land Code 1965, which provides that prior written approval from the relevant State Authority is required for any acquisition of property by non-citizens and/or foreign companies.
Is there a way to buy a property without the foreigner consent fees and the minimum threshold?
Yes. That is through a locally owned company with at least 51% of the share belongs to a Malaysian. To incorporate a company in Malaysia you may refer our company incorporation service.
We can provide a nominee local director for the setup purpose:
- The nominee shall be in the company for 1 to 4 months and at 2 points of time, ie when signing of SPA and registration of transfer
- The nominee shall IMMEDIATELY sign a Share Transfer Form to transfer the shares back to the foreign shareholder
- The Share Transfer Form shall be kept by the foreign shareholder
| Buying Under Company with a Malaysian Nominee | Buying as a Foreign Individual |
|---|---|
| Can buy property without minimum threshold |
Can only purchase property above minimum threshold |
| Can buy any type of property & any category of land, including agricultural land | Can only buy the following types :- • RESIDENTIAL: Two Storeys and above & Condominiums • SHOPLOT: Three storeys • Industrial land Cannot buy agricultural land |
| Need not pay state approval fee ie for Johor State: (2% of Purchase Price) and application fee RM1,000 |
Must pay state approval fee ie for Johor state: (2% of Purchase Price) and application fee RM1,000 |
| • Standard Rate : 24% • Paid up capital ≤ RM 2.5 million : • First 500,000 of net profits: 17% • Excess profits: 24% |
• 30% tax rate • Paying as a resident if you stay more than 182 days in Malaysia in a year (0% – 30%) |
| Can transfer to children easily | Must make a will, and apply state consent to transfer to foreign children |
Are there other benefits of incorporating a company?
- To get the benefits when purchasing property
- To do business
- To apply for an employment pass
- Limited liabilities – Creditor can not take personal assets
- Save on Real Property Gain Tax (RPGT)
Below is a table on the Real Property Gain Tax for your easy reference.
| Holding Period | Citizen or Permanent Resident | Company | Non-citizen or permanent resident |
|---|---|---|---|
| Within 3 years | 30% | 30% | 30% |
| In the 4th year | 20% | 20% | 30% |
| In the 5th year | 15% | 15% | 30% |
| Beyond 5th year | 5% | 10% | 10% |
| Retention Sum | 3% | 3% | 7% |
Contact us NOW to understand how we can assist you in your purchasing decisions.