Rules and Regulations On Purchasing Property in Malaysia

The following article is intended to give a general overview of some common legal issues regarding the purchase of property. We strongly recommend you obtain the services of a good lawyer when you buy property.


Legal Issues

Property comes under the control of the various State Governments, so rules can vary depending on which part of Malaysia you buy in. Although the Federal Government passes national regulations, the States have the option of implementing these (or not) when it comes to property matters. One example is setting the minimum price at which foreigners can buy property, where the Federal Government raised the price and initially some States chose not to follow.



There are two categories of title in Malaysia available for non-Malaysians. Freehold (which gives the owner full, permanent ownership of the property) and leasehold (which allows the owner to stay in possession for a limited period). Most leaseholds titles are originally for 99 years and can be extended on paying a further sum. A house receives a “title” once completed and an apartment or condominium is given a “strata title”. In the case of new apartment buildings, the strata title may not be issued for some time after the building is completed.


Sale & Purchase agreement

The purchase agreement for a property is called the “Sale & Purchase Agreement” (SPA or S&P). These are fairly standard, but it is best to have a lawyer representing your interests before signing any agreements.

A memorandum of transfer also has to be signed to transfer the title from the seller to the purchaser. In the case of a new development where the developer does not yet have full title, the seller will state in the SPA that this will be given as soon as they have proper title.


The following article tell us how to buy our second property in Malaysia. There are few aspect to be notice.


Special Note for Malaysia My Second Home visa holders:

If you are planning to move here under the Malaysia My Second Home program, you will be eligible to make a lower Fixed Deposit if you have already (before applying for the MM2H visa) purchased a property in Malaysia over RM1 million and do not have any outstanding loan on it. If you make a purchase after getting the visa, then you can have your Fixed Deposit reduced after 12 months on showing evidence that you have bought and paid for a house in Malaysia. The SPA must be signed after the issuance of the MM2H visa in order to draw the funds from the fixed deposit (after the 1 year period). In this case, the value of the property is not a factor relevant and you can have a loan on the property as long as the cash amount you have paid exceeds the amount you wish to withdraw from your FD.



For most property purchases, foreigners are no longer required to obtain Foreign Investment Committee (FIC) approval. Foreign purchasers are still required to obtain approval from the State Authorities, who will consider factors such as the location of the property, the type of property, and, in new developments, the percentage of total units sold owned by foreigners. State consent can often take six months and, in some cases, longer.


Property Gains Tax

From 1 January 2012, the effective tax rate on disposal of real property was 10% in the first 2 years after purchase, and drops to 5% in the third, fourth and fifth years. No tax is imposed on profits gained if the property is disposed of after 5 or more years of ownership.


Legal Fees

Value of property Rate
1st RM150,000 1.00%
Next RM850,000 0.70%
Next RM2,000,000 0.60%
Next RM2,000,000 0.50%
Next RM2,000,000 0.40%
Over RM7,500,000 (negotiable) >0.40%

Source: PropertyInMalaysia

Summary, there are few rules and regulations to follow for those who wish to purchase property in Malaysia.


For more information about Property Investment in Malaysia, please visit the following website
Property Intensive Seminar