• An Expat’s Guide to Buying Properties in Malaysia

    Malaysia is one of the best countries to live in Southeast Asia. In fact, as per a 2017 report of International Living (IL), Malaysia clinched the sixth place in the Annual Global Retirement Index.

    With an affordable standard of living, top-class healthcare facilities, excellent culinary and shopping options, Malaysia never ceases to amaze you. But is it easy for expatriates to be able to buy a property of their own in the country? You can use the following guide to see what you need to know as a foreigner before settling down in Malaysia.

    Types of Properties that Expats Can Own in Malaysia

    Foreigners can buy properties in Malaysia provided they comply with the rules and regulations set by the Malaysian government. They can own even 100% of a property and there are no limitations as to how many properties they can own.

    Foreigners are allowed to buy bungalows, mansions, terraced homes, condominiums, as well as commercial and industrial properties. However, to protect the interests of the indigenous people, expatriates won’t be able to own properties built on a Malay Reserved Land or a Bumiputera unit. Moreover, foreigners cannot own agricultural land as well as low and medium cost residential units which are defined by the state authority.

    As far as the cost of the property is concerned, foreigners won’t be able to own properties more than RM1 million.

    Ideal Locations to Look for a Property

    Most foreigners look for properties in locations where they have access to public transport, highways, hotels, malls, food outlets, and leisure spots. You can easily find properties within RM1 million in Kuala Lumpur, Petaling Jaya, Kepong, Ipoh, and Damansara. Some other ideal locations are Desa Sri Hartamas, Mont Kiara, Bukit Tunku, Bangsar, and Johor.

    Malaysia My Second Home (MM2H)

    The Malaysian government has introduced a special programme called Malaysia My Second Home (MM2H) programme, which gives expatriates the option to buy a property at a much lower price than the one quoted. Expatriates who want to opt for a long-stay visa of 10 years can apply for this programme. More than 23,000 foreigners have been given the green signal for the MM2H Visa so far. Foreigners who apply for this programme get a high finance margin of 80%. However, if the applicant is married to a Malaysian citizen, the finance margin can be increased to 90%.

    Eligibility Criteria

    There are no specific criteria to be eligible for this programme. The programme is open to all foreigners and they have the option to bring their spouses and children along. However, you need to fulfil certain criteria as far as your financial capabilities are concerned.

    For applicants below 50 years of age:

    • The applicant must have at least a minimum of RM500,000 in their account and an offshore income of RM10,000 per month.
    • The applicant must open a fixed deposit account at any bank in Malaysia with at least RM300,000.
    • Once the applicant completes a year into the programme, they can withdraw up to RM150,000 if they need those expenses for genuine reasons. The applicant will still need to maintain a balance of RM150,000 from the second year onwards.
    • Applicants won't be allowed in the State of Sarawak if they are below 50 years of age. However, if they are 30 years and above and have children enrolled in a Malaysian school or are undergoing medical treatment in the state, they can apply.

    For applicants of 50 years of age and older:

    • You must qualify any one of the following criteria:
      • The applicant must open a fixed deposit account at any bank in Malaysia with at least RM350,000 or
      • The applicant must show proof of monthly offshore government pension of at least RM10,000.
    • Once the applicant completes a year into the programme, they can withdraw up to RM50,000 if they need those expenses for genuine reasons. The applicant will still need to maintain a balance of RM100,000 from the second year onwards.

    How An Expat Can Buy a Property

    With many property portals available at the click of your fingertips, it is easy to shortlist probable houses in the areas you’re looking at. You can also look for properties in the newspapers or at real estate agents’ offices. If you are unaware of how things work in Malaysia’s real estate business, it is advisable to hire an experienced real estate agent and a legal advisor to help you with all the legalities involved. They can help you estimate the value of a property, check if the property or land unit is a Malay Reserved Land or a Bumiputera unit, and undertake all the necessary paperwork for you.

    Once you finalise a property, you will have a Sales and Purchase Agreement and will receive a booking receipt for the same. You can apply for financing and wait for the approval of the bank. Most property developers will ask you for an initial deposit, which is usually 10% of the total amount you will be paying. Meanwhile, you need to furnish a list of documents to your legal advisor, who will be applying for state authority consent on your behalf. By the time you have received consent, your loan would be disbursed to your account. Pay off the remaining amount to the property developer and you will be given the date when you can move into the property.

    Home Loan Application

    Many major banks in Malaysia offer housing loans for expatriates. You get a high margin of financing of 80% if you are an MM2H Visa holder. If you are not an MM2H Visa holder, you only get 70% of finance margin. Once the loan application is processed and approved, the amount is disbursed quickly. You need to be over 18 years to age to apply for a housing loan.

    Documents Required

    When you apply for a housing loan/financing from a bank you will need to furnish a few documents before purchasing a property. Though the documents could be different from bank to bank, the following are the most common ones you’ll need to submit:

    If you are a salaried professional:

    • 1 copy of your NROC or 1 copy of your passport.
    • Last 3 months’ salary slips.
    • The Latest EA form/EPF statement.
    • A letter of confirmation from your employer confirming employment.
    • The Sales and Purchase Agreement or booking receipt.

    If you are a self-employed professional:

    • 1 copy of your NROC or 1 copy of your passport.
    • Last 3 months’ salary slips.
    • Last 3 months’ bank statement
    • The Latest EA form/EPF statement.
    • The Sales and Purchase Agreement or booking receipt.
    • Business registration certificate.

    Conclusion

    Buying a property in a different country is not easy, but with these tips in mind, you will have a fair idea of how properties are sold to foreigners without any hassle. You can take a look at some of the housing loan schemes offered to foreigners in Malaysia and choose the one that suits your requirements the best.

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