Buying property in malaysia as an investor or home buyer


Historically Malaysia has always been a major source of business in terms trade, commerce, and real estate. Thanks to the straits of Malacca, Malaysia’s economy has continued to grow based solely on its location. Combined with the present stable economy, business-friendly policies, and a strong Islamic Banking industry, Malaysia is most definitely one of the best places to invest in, in all of Asia.


Before buying a property, it is important to know what you are actually spending your money on. In this section we will describe the types of real estate you can buy in Malaysia.

Similar to other countries in the ASEAN and the Middle East, in Malaysia there are three main types of properties, residential, commercial and land.



  • Anim pariatur cliche reprehenderit, enim eiusmod high life accusamus terry richardson ad squid. Nihil anim keffiyeh helvetica, craft beer labore wes anderson cred nesciunt sapiente ea proident.




  • also known as ‘condos’, are similar to apartments. They offer a lot of the same features as a home or landed property, but they are managed and maintained by a development-team. This team insures that the condominium is built up to standards and that the building is well maintained.

    Buying or renting a condo is a form of self-investment; most people choose a condo because they want to make it their home. It provides the benefits of being able to customize your home with the features you want along with some added bonuses/amenities. Condominiums normally provide 24-hours security, sports facilities, laundry services, grocery stores and food courts, making living here very attractive.

    A certain maintenance fee is charged for these facilities and is not included in the price of the condo. Compared to the prices of other landed properties such as row houses, bungalows and villas, returns for condominiums in Malaysia are much higher.

    Gross rental yields for condominiums, if they are fully rented out, ranges from 4.50% to 5.44%, while bungalows can yield anywhere from 3.75% to 4.20%.





  • On the other hand, is a great opportunity for non-permanent living. As with condo’s, the maintenance of an apartment is the responsibility of the landlord or property manager. If you find that you are likely to move around from city to city, are not settled financially or career-wise, then making an investment in renting an apartment might be your best option.

    IQI Global can provide you with a wide array of Condominiums and Apartments to choose from that suit your residential needs.





  • There are 3 types of land titles in Malaysia: Freehold, Leasehold and Malay Reserve land. This kind of property is suitable for bigger families as it provides more room. Landed houses also have open spaces for those who enjoy gardening or pets, and allow room for renovations and extensions.





  • Owning a property freehold means that you own the building and the land that it is built on, in perpetuity; i.e. you own the property and can live in it for as long as you desire, and it passes on to your descendants with no liabilities. If someone were to look at the title for the property it will be under your name.

    In the case of apartments, flats and condominiums, apart from owning a particular unit the owner becomes a share holder for the common area of the property.






  • The land where the property sits on is under someone else’s name and they are leasing out the land to you or letting you use the land for a set time period. Here the buyer or investor owns the property but not the land it is built on. In most cases, once the set time period on the lease for the property has expired, the lease period can be extended for a premium. However it is entirely dependent on the land laws of the country in question and the leasehold property’s rightful owner, whether the period should be extended and by how much. Most leases are given out for a period of 99 years; however, this is subject to the land owner and sometimes can go as high as 999 years.

    Sometimes leasehold properties can be converted to freehold. This is also dependent on the land laws of the country and the decision of the rightful owner.

    In the context of Malaysia most of the properties in urban areas/cities are leasehold, and the value of a particular property no longer hinges on the type of title on that property but rather the lifestyle element that the property may provide.





  • - Malay owners are not allowed to rent out properties built on MRLs or the lands to non-Malays
    - All businesses that operate on MRLs must be owned by Malays.

    The Malay Reservation Land Law has two main objectives:
    - To prevent State Land in Malay Reservation Area from being disposed by any means to non-Malays.
    - To prevent private dealings between Malay and non-Malay in terms of Malay Reservation Land.

    Any land which has been declared as a Malay Reservation land cannot be bought by a foreign investor.
    The following land types may be declared as Malay Reserve:

    - Government Land (known in the federal territory of Kuala Lumpur as federal land)
    - Forest Land
    - Public Reserve
    - Property on Malay reserved land





  • According to Malaysian law, non-Malaysian citizens can invest in any type of property in Malaysia including bungalows, condos, and land. They are allowed to invest in both residential and commercial properties in their own name or their company’s name. However there are some restrictions; foreign investors cannot invest in the following properties:

    - Properties valued less than the minimum purchase price as prescribed under the State Land Rules varying from state to state
    - Residential units under the category of low-medium cost as determined by the State Authority
    - Properties Built on Malay Reserved Land
    - Agricultural land (unless above 5 acres and for commercial purpose)
    - Properties and property development projects allocated to Bumiputra as determined by the State Authority

    According to the National Land Code 1965, in order for a non- Malaysian or a foreign company to acquire a property in Malaysia, they must seek the approval of the EPU (Economic Planning Unit), unless of course they are exempted, like if they are part of a company that has been given the status of Labuan Offshore Companies.

    Under the same Code, if a foreign national wishes to purchase a residential property in Malaysia or if a person wishes to sell/dispose of their property to a foreign national, they must make an application to the State Authority and obtain State Consent before they complete the transaction. If State Consent is not obtained then the sale or purchase of the property can be rendered null and void.

    However, Non-Malaysian citizens may invest in Labuan. This is a part of Malaysia and comprises of a few small islands located off the coast of Sabah.

    The Labuan Offshore Companies Act 1990 (LOCA) provides for the establishment of offshore companies in Labuan. Any acquisitions of properties by companies that have been granted the status of Labuan Offshore Companies are exempted from EPU approval. Incorporation of Labuan International Companies can be 100% owned, with no need for a Malaysian partner. Also, a foreign

    company Incorporated under the laws of another country may apply to be registered as being continued in Labuan.



  • Malaysia My Second Home or MM2H is a programme promoted by the Malaysian Government. It allows foreigners who meet certain criteria stay in Malaysia for as long as they want on a multiple-entry social visit pass.

    MM2H holders receive multiple benefits which include the capability to purchase any number of residential properties subject to the minimum rates established for foreigners by the different States. In addition, MM2H holders do not require EPU approval to purchase a property.



  • From the 1st of September 2014 onwards, the Land Office of Selangor changed the foreign property ownership minimum purchase price regulations to RM 2 million, and the minimum purchase price for Kuala Lumpur was set at RM 1 million. Foreign buyers must comply with these conditions when making property purchase and the minimum property purchase price for foreigners varies from state to state.

    Also, foreigners cannot buy landed properties (in Selangor) unless said property is in a gated community, and has a Landed Strata title.



  • Malaysia My Second Home or MM2H is a programme promoted by the Malaysian Government. It allows foreigners who meet certain criteria stay in Malaysia for as long as they want on a multiple-entry social visit pass.

    MM2H holders receive multiple benefits which include the capability to purchase any number of residential properties subject to the minimum rates established for foreigners by the different States. In addition, MM2H holders do not require EPU approval to purchase a property.



  • Bungalows

    Bungalows are detached stand-alone houses which normally come with a broad front porch, surrounded by its own land. In other countries a bungalow is a single story low house which is typically small in size when compared to most other dwellings; in Malaysia however bungalows come in varying sizes, some with a built-up areas exceeding 10,000 square feet.

    The estimated price range for a Bungalow in Malaysia can be anywhere between RM 400,000 to RM 5,000,000 depending factors such as size and location. Some luxury bungalows may cost more (15,000,000 or more)

    Estimated rent range for a Bungalow in Malaysia can be anywhere between RM 8000 to RM 30,000 a month. Some of these bungalows are converted into commercial properties and fetch respectable rental yields. However, knowledge of the prevailing laws governing the conversion of these properties to commercial establishments is important in order to tap into the opportunities that bungalows present.

    Terraced Houses

    These types of housing developments share a wall with other adjoining properties on both sides. These adjoining properties are usually identically designed and come in long rows. They are usually one or two stories high but sometimes go higher (though that is uncommon).

    The estimated price range for a terraced house in Malaysia can be anywhere between RM 300,000 to RM 2,000,000 depending factors such as size and location.

    Estimated rent range for a terraced house in Malaysia can be anywhere between RM 2000 to RM 10,000 per month.

    Townhouses

    These are typically similar to terraced houses as they are also built in a row with identical designs. The major difference between them is that in townhouses, each building block typically consists of two residential units. The lower unit generally takes up the ground floor and part of the first floor and the top unit will consist of the rest of the first floor and the second floor. Each unit comes with their own entrance and a small plot of land.

    The estimated price range for a townhouse in Malaysia can be anywhere between RM 300,000 to RM 1,500,000 depending factors such as size and location.

    Estimated rent range for a Townhouse in Malaysia can vary anywhere between RM 3000 to RM 10,000 each month.

    Semi – Detached

    Semi – Detached houses or Semi – D houses consist of two houses built side by side, sharing a wall; in other words two homes make up one building. These houses typically feature small plots of land on one of its sides, the back and the front; they are larger than terraced and town houses. These houses are usually part of gated communities and come with added exclusivity and security.

    The estimated price range for a Semi – Detached in Malaysia can be anywhere between RM 500,000 to RM 5,000,000 depending factors such as size and location.

    Estimated rent range for a Semi-Detached House in Malaysia can be anywhere between RM 2000 to RM 20,000 every month.

    Apartments/Flats

    Apartments or Flats are a common staple in major towns and cities; they vary from small and cheap to large and expensive. Newer and more expensive apartments/flats will usually come with security and offer various other facilities such as a children’s park or a common gymnasium.

    The estimated price range for an apartment/flat in Malaysia can be anywhere between RM 90,000 to RM 3,500,000 depending factors such as size and location.

    Estimated rent range for Apartments/Flats in Malaysia can be anywhere between RM 800 to RM 3000 per month.

    Serviced Apartments/Flats

    These property types are like regular apartments/flats except that most of these properties come fully furnished, and are provided with hotel like amenities such as a fitness centre, a laundry room and room service. In view of these extra amenities, the rent for a serviced apartment may be

    considerably higher than an ordinary flat. Companies frequently use serviced apartments to host professionals who may be on local or international work assignments. Although serviced apartments are mostly used by business executives, they are also available to the public.

    The estimated price range for a serviced apartment/flat in Malaysia can be anywhere between RM 600,000 to RM 3,500,000 depending factors such as size and location.

    Estimated rent range for Serviced Apartments/Flats in Malaysia can vary anywhere between RM 1200 to RM 7000 a month.
    Low to Medium Range Condominiums

    Condominiums are normally high rise residences which are part of a larger building. Their main selling points are their common recreational centres and security services.
    Low range condos typically feature basic facilities which include 24-hour security service and parking space. Medium range condos come with more facilities which may include a swimming pool, tennis courts, gymnasium, landscaped gardens and more.

    The estimated price range for a low to medium ranged condominium in Malaysia can be anywhere between RM 500,000 to RM 700,000 depending factors such as size and location.

    Estimated rent range for a Low to Medium Ranged Condominiums in Malaysia can be anywhere between RM 1200 to RM 5000 every month.

    Luxury Condominiums

    These property types are built on the same concept as the Low to Medium range condos; however they offer more comfort, prestige and style. Luxury condos are made to provide more space and privacy and often feature more modern interior design and decoration.

    Also, the facilities offered tend to include a state-of-the art security system, gymnasiums, infinity swimming pools, Jacuzzi, spas, children’s playground, yoga deck and lounge, private parking and are generally situated in a much more exclusive neighbourhood.

    The estimated price range for a low to medium ranged condominium in Malaysia can be anywhere between RM 800,000 to RM 8,00,0000 depending factors such as size and location.

    Estimated rent range for a Luxury Condominium in Malaysia can vary from RM 3000 to RM 8000 per month.



  • Kuala Lumpur

    The financial heart and capital of Malaysia, Kuala Lumpur offers luxury high-rise condominiums, serviced apartments, thriving commercial hubs, world class restaurants, and its exuberant shopping centers and malls.

    Selangor

    Considered Malaysia’s richest state in terms of gross domestic product, Selangor is filled with prosperous urban centers which include Petaling Jaya, Shah Alam, Puchong, and Klang. Selangor is well connected with public transport and has all the modern conveniences as well as more green living spaces.

    Johor (Iskandar Malaysia)

    The state of Johor is the third largest state in Peninsular Malaysia and is a mix of modern culture, urban settings, coastal life and ancient biodiversity. It is impossible to talk about Johor’s investment potential without mentioning the special economic region of Iskandar Malaysia, which is the new main southern development corridor in Johor. It is a major government initiative to attract foreign investment. The area has residential, commercial, educational and entertainment zones.

    Penang

    Also known as the “Pearl of the Orient,” Penang is especially loved by expatriates who consider it their home away from home. There are plans to develop the Northern Corridor Economic Region (NCER), an economic and social development initiative that aims at increasing the income levels of Penang, northern Perak, Kedah and Perlis as well as attract more foreign investment in this area

    Melaka

    Tourism and manufacturing are the two main sectors in Melaka’s economy. Its true wealth lies in its cultural heritage and it has several locations that are of historical interest that brings tourists to the city over and over again. Melaka has seen a massive increase in real estate development, to especially attract foreign investors.

    Is Malaysian property a Good Investment?

    Malaysia has one of Southeast Asia’s most secure property ownership systems. Malaysia’s real estate sector is filled with potential and is also one of Asia’s better real estate investment options.

    Be sure to deal with a reputable company. New homes and condo units always come with a warranty. It is best to make your deal through an established property agency to avoid being fooled by glib talkers.

    There is a clear trend for Malaysian real estate to offer lucrative returns when one invests wisely. Rapid urbanization and an increasing population ensure rising property value, making it worth looking at the suburbs for a long-term, appreciation-based investment.

    Home ownership brings many responsibilities.

    Never fear though, because we will help you step by step. Just click here and we will tell you the major steps you need consider when deciding between buying and renting.



  • Rental Income Tax:

    Rental income tax in Malaysia for residents is a flat rate of 20%. For non-residents, the numbers bump up to 25%.

    Real Property Gains Tax:

    Real Property Gains Tax or RPGT for short is the Malaysian equivalent of Capital Gains Tax. RPGT is paid on any profit that is made when a property is being sold. In Malaysia the RPGT rate may be up to 30% if the property to be sold has been held for less than 5 years. However it reduces to 5% if it is held for up to 5 years and goes down to 0% for residents when held for more than 5 years (the rate remains at 5% even after 5 years for non-residents). This is to prevent speculation by short term buyers and thus keep property prices stable.

    Assessment Tax on Residential Property:

    Assessment tax on residential property is a local tax that is based on the annual rental value of the property, as assessed by the local authorities. It is generally levied at a flat rate of 6% and is payable in two installments.

    Quit Rent:

    Quit rent is a local tax that is levied on all landed properties and is payable annually at a rate of 1 to 2 Sen per square foot. Quit rent liability is generally estimated to be less than RM100 per year.