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 reasonable by international standards, but there are rules that need to be understood. The latest version of the MM2H visa requires 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. What properties can foreigners buy today?
Foreigners can own any type of property (residential units – both landed and high-rise, as well as commercial and industrial properties); however, there are some restrictions, and 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:
1. Properties built on Malay Reserved land
2. Low and medium-cost residential units, as defined by the state authorities – usually a minimum price is set at which foreigners may buy.
3. Some developments have a bumiputra quota meaning only locals who are bumiputras can purchase them (Bumiputras mean 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 visa holder to hold on to the property for 10 years. They are permitted to upgrade to a more expensive property at any time, but not to buy a lower-priced place. If they cancel the MM2H visa they are free to sell it. Each MM2H visa sets a different minimum price for the property purchases and the amount of the purchase must also exceed the state limit.
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. In some states, MM2H visa holders have been given a lower limit than other foreigners.
It should be noted that the minimum price set by the type of MM2H visa only applies if the state limit for foreigners is the same. For example, the Silver tier MM2H visa requires the applicant to
buy a property above RM600,000, but many states have a minimum price for foreigners buying property of RM1,000,000, so that amount would take precedence.
Property prices vary considerably by state, so a property in major cities like Kuala Lumpur or Penang will be more expensive than in most other states.
The table below shows the minimum price 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 the separate legal title for an individual unit or parcel within a strata development, where ownership can be registered in the unit owner’s name.
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 for younger applicants who can make full repayment by age 70. If desired we can assist in determining your loan eligibility and loan amount.
Often, 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 for the property, the bank will be advised that the withdrawn funds can only be used to make payment against the property.
If the MM2H applicant plans to withdraw funds from the fixed deposit as quickly as possible, they are advised to place the deposit for less than the usual one-year term to avoid penalties for early withdrawal. The interest may be lower, but canceling a longer-term FD could mean all the interest is forfeited.
5. Major costs to purchase a property in Malaysia?
There are some standard costs to be considered when buying property:
Stamp Duty
Stamp duty is payable on the instrument used to transfer ownership of the property, usually the Memorandum of Transfer (MOT), or in some cases a Deed of Assignment (DOA) where the individual or strata title has not yet been issued.
For MMM2H visa holders and most other non citizens and foreign companies purchasing residential property, the stamp duty rate on the instrument of transfer is 8% for instruments executed from 1 January 2026.
The MOT is the official instrument used to transfer and register ownership of the property in the purchaser’s name once the relevant title is available. Where financing is used, stamp duty is also payable on the loan agreement, generally at 0.5% of the total loan amount.
In most cases, the main property stamp duty is not paid on the Sale and Purchase Agreement (SPA) itself. Instead, the larger stamp duty is triggered when the ownership transfer instrument, such as the MOT or DOA, is stamped, and when any financing document, such as the loan agreement, is stamped.
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 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 may have 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 a two-story unit in a high-rise building.
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.
If looking at an existing property, check how well it is maintained and ask about the sinking fund to see if there are funds for any essential maintenance of the block.
House burglaries are quite common in Malaysia, and it is wise to think about security, especially if you plan to travel. Some 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.