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Malaysian Home Buying Guide
If you are considering purchasing property in Malaysia, the following home-buying process is provided for your reference. Generally, the process differs between foreign and local buyers. The main differences lie in the application for foreigner permits and the minimum purchase amount requirements. Additionally, before paying a deposit, be sure to have your real estate agent and lawyer thoroughly investigate whether there are any additional conditions for foreign buyers regarding the property and how long it will take to formally obtain ownership of the property.
Home Buying Guide
1
Property Seminars
Attend a Malaysian property seminar first, where we will assess suitable investment plans for you.
2
Property Site Visits
After selecting your ideal property, join a Malaysian tour group to visit the development.
3
Reserve Unit Type
Reserve your chosen unit type. It will not be available for purchase by others during the validity period.
4
Foreigner Permit
The fee for processing a foreigner permit is 2% of the property price, but the Malaysian government will cover this cost for you.
5
Apply for a Home Loan
If needed, you can apply for a home loan. The loan-to-value ratio is approximately 50-70% of the total price.
6
Legal Fees and Miscellaneous Expenses
Sign the Sale and Purchase Agreement with the developer and pay the property installments as agreed, followed by legal fees and miscellaneous expenses.
7
Progress Payments
For properties under construction: Pay installments according to the construction progress. For completed properties: Arrange for a loan or pay the final balance.
8
Inspection and Handover
After paying the final balance, you can proceed with the handover inspection. Upon completion, the developer will hand over the property.
9
Property Title Transfer
After paying the property title transfer fee, the property will be entirely yours.
10
Property Rental
After handover, you can choose to live in it yourself or rent it out. If renting out, you can manage it yourself or entrust it to a professional rental management company.
Buy Property FAQ
As of 2024, official Malaysian statistics indicate that Chinese people constitute approximately 20% of Malaysia’s total population. This means 2 out of every 10 people are Chinese. Over 6,000 property owners are concentrated in Kuala Lumpur, Johor Bahru, and Penang, with a smaller number in Malacca.
Is there a minimum purchase amount for property in Malaysia?
Yes, the Malaysian government wants foreign investors to avoid competing with local residents for affordable housing, so a minimum purchase threshold is set. For example, the latest policy in Kuala Lumpur starts at RM1 million, which is approximately NT$8 million.(2026)
Can foreigners get a mortgage for property in Malaysia?
Yes, but you must have a residency permit and proof of stable income. Generally, loans are between 50% to 70% of the total price, and interest rates depend on the rates offered by individual banks.
Is property ownership in Malaysia freehold?
Property ownership in Malaysia varies by state regulations. Typically, there is freehold and leasehold. If it is leasehold, it is for 99 years.
How long must one own a property before selling it?
You can sell it at any time, but if sold within five years of ownership, a 30% tax on profits is required. If sold in the sixth year, only a 10% tax on profits is required.
Is rental income taxable?
Yes, foreigners must pay 26% tax on rental income, but this is calculated on the remaining rent after deducting various expenses.
What is the approximate rental yield?
According to Global Property Guide data, in Q1 2024, the average rental yield in Kuala Lumpur was about 4-5%, while in Johor Bahru it was 4.5-6%.
Do foreigners have title deeds for properties purchased?
Yes, title deeds serve as proof of ownership for the property or land.
Is it safe to transfer funds for property purchases overseas?
It is safe, but your overseas account must be an escrow account. The bank will disburse funds only after the rights and obligations of both buyer and seller have been fulfilled.
Can property purchased in Malaysia be inherited by family members?
Yes, and Malaysia has no inheritance or gift tax.
What are the types of land titles in Malaysia?
Land titles in Malaysia are divided into freehold or leasehold. Both types are further divided into individual title and strata title.
Individual Title: For detached houses, granting full ownership of the entire land parcel.
Strata Title: For apartment buildings. The developer divides the entire land parcel, and a portion of the land is allocated based on the number of units and area purchased by each owner, known as a strata title.
What are the annual fixed expenses for owning property in Malaysia?
There are 4 types of fixed expenses incurred while holding property. Please include these fixed expenses when calculating investment returns.
Annually: Quit Rent (Land Tax), Assessment Tax (House Tax), Homeowner's Insurance.
Monthly: Maintenance Fees, Rental Management Fees.
If defects are found upon property handover, is there a warranty period for repairs?
For damages, shrinkage, or other defects caused by construction flaws or poor material quality, the developer must carry out repairs within 12 months after handover (timeframe subject to contract).
What is HDA?
The Housing Development (Control and Licensing) Act 1966 (HDA) in Malaysia provides a framework of protective measures designed to safeguard homebuyers, primarily in the primary property market. It mandates standardized agreements, ensures financial accountability of developers, and provides recourse for defects and delays.
Malaysia HDA What protective measures are in place?
- Mandatory Standardized Contracts (SPA)
- Defect Liability Period (DLP)
- Financial Safeguards (HDA Account)
- Licensing and Monitoring
- Dispute Resolution
- Protection Against Abandoned Projects
- Recent Reforms and Digitalization
Which properties are not protected by HAD?
Properties that are purely commercial in nature are not protected, such as shopping malls, office spaces, retail shops, etc. Additionally, second-hand homes beyond their two-year warranty period are also not protected.
Home Buying
Malaysia Home Buying costs List
Whether your property is rented out or occupied by you, there will be expenses incurred during that period. CCPS investment advisors will meticulously calculate various expenses for you to maximize profits and minimize risks. See the attached chart.
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TAIPEI: 9F.-2, No. 669, Sec. 5, Zhongxiao E. Rd., Xinyi Dist., Taipei City 10595 Tel: +886-2-2312-0099
KUALA LUMPUR : B02-D-10-1, Menara 3, KL Eco City, No. 3, Jalan Bangsar, 59200 Kuala Lumpur, Malaysia. Tel:+603-2202-3866
JOHOR BAHRU : C3-0220, Level 2, Indahwalk 3, Jalan Indah 15, Taman Bukit Indah, 79100 Iskandar Puteri, Johor. Tel:+607-207-5680