What Ex-Pats Need to Know About Buying Property in Malaysia

Purchasing property in Malaysia is very possible. However, it does need careful planning for an ex-pat to do so. It won’t be as straightforward as acquiring property back home. Having fallen in love with the country, the delicious food, and the friendly people, knowing what’s possible in terms of relocating becomes a high priority. In this article, we cover a few of the things that are important to appreciate. 

State Authorities Grant Approval

Individual Malaysian state authorities grant foreigners the right to purchase property in the areas that they govern. Without this approval, they are unable to do so. As such, two properties across the road from each other but technically in two different states will have different laws and rules applied. State rules are created locally and may reflect different preferences or concerns that aren’t relevant or considered elsewhere. A foreigner is designated as someone who is a natural citizen but not yet a permanent resident. This distinction is an important one because, otherwise, different access to property might be permitted. 

A Foreigner vs Foreign Companies

Different rules apply to foreign individuals or couples versus those purchasing a home or another property type through a foreign company. It’s fair to say that the rules relating to purchasing are more complicated with foreign entities than with ex-pats purchasing in their name. While there can be valid reasons for acquiring property via a foreign company, when it’s simply a home, then it can unnecessarily complicate the transaction. 

Furthermore, there will be some situations where it’ll be possible to get approval to purchase a home as an ex-pat, but not qualify for the purchase of the same property through a foreign company. Therefore, the rules are sufficiently different to require care to be taken and professional advice sought. 

Properties Available and Not Available for Purchase

Some properties aren’t eligible for foreigners to purchase in Malaysia. When it comes to any purchase of real estate in Asia, it usually comes down to it either being prohibited entirely or there being those that may be purchased and others that cannot be. This may be due to the need to protect habitats or local resources or to avoid the property market becoming heavily inflated, as is the case in Canada where many residents are now priced out of the market. Asian countries are keen to avoid the same fate, and so restrictions on the property types are commonplace.

Properties Not Available for Purchase

The main restrictions to watch out for include:

  • Projects for development relating to Bumiputera groups
  • Malay reserved land where real estate is developed
  • Affordable units designated for lower-income groups, based on state specifications

Properties Available for Purchase

When avoiding any properties that fall under the above restrictions, there are many townhouses, condos, and other types that are purchasable. When looking for what’s known locally as tanah untuk dijual, i.e., land for sale, seeing the available listings on the PropertyGuru site is a good start. With PropertyGuru, you can sort the listings by property type and price.

Terminology Variances to Be Aware Of

A point of note here is warranted. Due to the prevalence of well-spoken British English in many parts of Malaysia, along with an American media influence too, the language and terms applied to real estate vary in different states.

Therefore, a condominium (an American phrasing) may be referred to as “a flat,” which is the British terminology, or visa versa. It is all too easy to review complete property listings in different states and become confused due to the inconsistent use of descriptor terms for the property type. 

Dig a little deeper into the details, photos, and/or video walkthroughs to confirm that the property is what you think it is. This saves on wasted time and additional headaches later.

Malaysia My Second Home (MM2H)

An extremely popular Malaysia My Second Home (MM2H) scheme exists. This is essentially a retirement visa option with the inclusion of a property purchase under specific rules. As with many visitor visas globally, this is currently suspended due to the pandemic. 

As with other state rules, the rules on the minimum property value for purchase under the MM2H scheme differ depending on the location. It may be as low as RM500,000 with a condo in Malacca, and RM1 million in Langkawi.

Where is Best to Purchase?

There are 13 states in Malaysia, each with its own cuisine, cultural differences, and varied landscape. Not only do the purchasing rules vary by state, but the Malaysian Ringgit can go further in some regions than others too. Depending on the budget, some states may be preferable over others if they match the list of must-haves or come with a greater likelihood of being welcomed into the community. If you have previously rented in the same area and love the local people, then that can be a major selling point to staying in that state.

Getting sensible advice from a local realtor is important. They should also be extremely familiar with discussing property purchases by ex-pats, confirming applicable state rules, and any other pertinent information. Doing so can not only help to avoid disappointment but also lead to a smoother transaction.

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