Malaysia is considered one of the most favoured property markets in Southeast Asia. It has fewer restrictions than most of its neighbours and prices are very reasonable by international standards but there are rules which need to be understood. The latest version of the MM2H visas require all applicants to buy property, which will probably have a positive effect on prices. There are already reports of a significant interest from Chinese buyers.
1. Can foreigners buy a property in Malaysia in 2025?
Foreigners can own any type of property (residential units – both landed and high-rise, as well as commercial and industrial properties). There are also rules governing foreign companies acquiring property or land in this country.
Land matters lie within the state government’s jurisdiction. The rules in the states of Peninsula Malaysia differ from those of Sabah and Sarawak. Each state has implemented different regulations governing foreign property acquisition i.e. types of property and application procedures. However, there are three types of properties that foreigners are not eligible to purchase in Malaysia:
- Properties built on Malay Reserved land
- Low and medium-cost residential units as defined by the state authorities – usually a minimum price is set at which foreigners may buy.
- Some developments have a bumiputra quota meaning only locals who are bumiputras can purchase them (Bumiputras means the ethnic group which includes mostly Muslim Malays and natives of Sabah and Sarawak.
Foreigners are generally not allowed to purchase agricultural land but if a specific housing development is on agricultural land gazetted for development, it is usually permitted.
2. How to buy a property under MM2H
The revamped national MM2H visa requires all applicants to buy a property within one year of having the visa endorsed in their passport. In the case of the Special Finance Zone MM2H visa, the property must be purchased before having the visa endorsed in the passport. So this would have to be done after the applicant has received conditional approval. The rules also require the via holder to hold onto the property for ten years. They can upgrade to a more expensive property and of course, if they cancel the visa they are free to sell it.
The Tourism, Arts and Culture Minister, who has responsibility for the MM2H visa programme has stated there will be no major changes to the visa in the coming years.
3. Minimum property price for foreign investment.
The Federal government set a minimum price of RM1,000,000 for foreigners buying property, which applies in all Federal territories (Kuala Lumpur. Putrajaya and Labuan) and is recommended for all states but some have set different limits.
Property prices vary by states so a property in major cirties like Kuala Lumpur or Penang will be more expensive than most other states.
The table below shows the minimum pirce at which foreigners can buy property. These change from time to time so they should be confirmed before purchasing
| State | Minimum Purchase Price |
| Johor | RM2 million (landed title in designated international zones) RM1 million (high-rise/strata title) |
| Johor (Special Finance Zone – MM2H) | RM500,000 (high-rise/strata title |
| Melaka | RM1 million (landed title) RM500,000 (high-rise strata title) |
| Negeri Sembilan | RM1 million (landed and landed strata title) RM600,000 (high-rise/strata title) |
| WP Kuala Lumpur | RM1 million |
| WP Putrajaya | RM1 million |
| Selangor – Zone 1 | RM2 million |
| Selangor – Zone 2 | RM2 million |
| Selangor – Zone 3 | RM2 million |
| Kedah Mainland | RM600,000 |
| Kedah (Langkawi island) | RM1 million |
| Penang (island) | RM3,000,000 (landed) RM1,000,000 (Condominium) |
| Penang (island with MM2H Visa) | RM600,000 (Condominium) |
| Penang (mainland) | RM1,000,000 (landed) RM500,000 (strata title) |
| Perak | RM1 million |
| Perlis | RM500,000 |
| Kelantan | RM1 million |
| Pahang | RM1 million |
| Terengganu | RM1 million |
| Sabah | RM1 million (landed title) RM600,000 (high-rise/strata title) |
| Labuan | RM1 million |
| Sarawak | RM500,000 |
“Strata title” refers to a unit in a development which has already had individual ownership transferred
4. Obtaining a loan in Malaysia
Banks in Malaysia are generally quite cautious and conservative so obtaining a loan as a foreigner is not easy but it is possible.
Usually, they will require full repayment by the age of 70 and they will only be willing to finance a lower percentage of the property than they would to a Malaysian who can often receive a loan of up to 90% of the purchase price.
Approved MM2H visa holder can apply to withdraw 50% of their Fixed Deposit when they have committed to a property and have signed the sale and purchase agreement. If in fact they have not yet paid the full amount of the property they bank will be advised that the money withdrawn can only be used to make payment against the property.
If the MM2H applicant plans to withdraw money from the fixed deposit as quickly as possible they are advised to place the fixed deposit for less than the usually one year so they do not face penalties for early withdrawal. The interest may be lower but it will not be forfeited if you wait until the shorter period is over before withdrawing.
5. Major costs to purchase a property in Malaysia?
There are some standard costs to be considered when buying property:
Stamp Duty
It is payable on the sale and purchase agreement for your property – just RM10
It is payable on the Memorandum of Transfer (MOT) or in some cases the Deed of assignment (DOA) at a flat rate of 4%. The MOT is the official instrument transferring ownership to the purchaser.
It is payable on any loan agreement at a flat rate of 0.5% of the total loan
Legal Fees
Legal fees are payable for the Sale and Purchase agreement and any loan agreement. These generally run at 1% to 1.25% of sum involved
Real Property Gains Tax (RPGT)
This only comes when selling the property, but it is worth noting that any sale within five years will attract a 30% tax on the on the profit on the sale, Sales made after five years are at the lower rate of 10%
LOCAL TERMINOLOGY
In Malaysia, they use certain words differently from some other countries when describing property, which can be a little confusing.
A standalone property is often referred to as a bungalow even though it consists of two or three stories.
High-rise buildings which have many facilities (squash, tennis, gym. swimming pool, BBQ) are often referred to as condominiums or condos. Apartments are used to describe more basic blocks without the amenities.
Link houses are basically terraced houses connected on both sides. The end unit is often extended to make it larger and more impressive.
A duplex refers to two story unit in a high rise.
SUMMARY
The quality and capital appreciation of properties vary quite a bit in Malaysia so buyers are advised to choose carefully. Some properties have flourished and command much higher prices while a few new developments were never finished. If you buy a new development, it’s best to do a background check on the developer and inspect the progress carefully.
House burglaries are quite common in Malaysia and it is wise to think about security, especially if you plan to travel. There are many houses located in gated communities which have their own security and high-rises usually have private security. With an existing property, you can see how effective it appears to be and the quality of the general building maintenance which can vary from property to property.