Buying Property in Malaysia Guide 2026

Malaysia offers attractive property investment opportunities for foreigners, with relatively affordable prices compared to regional neighbors like Singapore and Hong Kong. The country has clear regulations for foreign property ownership, making it a popular destination for property investors and retirees.

Why Invest in Malaysian Property?

Property Market Statistics

• Average price: RM450,000 (nationwide)
• KL average: RM750,000
• Foreign minimum: RM1,000,000 (most states)
• Rental yield: 4-7% gross
• Annual appreciation: 3-5% (long-term average)
• Foreign ownership: ~5% of transactions

Property Types Available

Key Considerations for Foreigners

1. Minimum Price Threshold - Must meet state requirements
2. State Consent - Required for all purchases
3. Levy - Additional fee in some states
4. Restrictions - Some property types not allowed
5. Financing - Limited mortgage options
6. Taxes - RPGT on disposal

Foreign Ownership Regulations

Foreigners can purchase property in Malaysia subject to certain conditions and restrictions set by the National Land Code and individual state authorities.

General Rules

Minimum Purchase Prices by State

Properties Foreigners CANNOT Buy

State Consent Process

All foreign purchases require state authority approval:

Application Process:

1. Sign Sale & Purchase Agreement
2. Submit consent application
3. Pay processing fee
4. State authority reviews
5. Approval/rejection issued

Processing Time: 3-6 months typically

Required Documents:

• Passport copy
• Sale & Purchase Agreement
• Property details
• Proof of funds
• Purpose of purchase

Levy Requirements

Some states charge additional levy:

MM2H Property Benefits

MM2H visa holders may have advantages:

• Lower minimum threshold (some states)
• Easier approval process
• Can purchase for own stay
• May access more property types

Note: Rules vary by state and change periodically. Always verify current requirements.

Residential Property Types

1. Condominium

High-rise residential with shared facilities.

Pros:

• Security and facilities
• Lower maintenance responsibility
• Often in prime locations
• Good for rental

Cons:

• Monthly maintenance fees
• Less privacy
• Strata rules and regulations
• Dependent on management

2. Serviced Apartment

Similar to condo but on commercial land.

Pros:

• Flexible use (residential/commercial)
• Often in city centers
• Good facilities
• Rental potential

Cons:

• Higher utility rates
• Higher maintenance fees
• May have usage restrictions
• Commercial land tenure

3. Landed Property

Houses with land ownership.

Types:

Pros:

• Land ownership
• More space and privacy
• No monthly maintenance (usually)
• Potential for renovation

Cons:

• Higher prices
• More maintenance responsibility
• Security concerns
• Harder for foreigners to buy

4. Commercial Property

For business or investment purposes.

Tenure Types

Freehold:

• Permanent ownership
• No expiry
• Higher value
• Preferred by investors

Leasehold:

• Fixed term (typically 99 years)
• Reverts to state after expiry
• Lower prices
• Extension possible (fee applies)

Strata vs Individual Title

Strata Title:

• For high-rise/shared developments
• Common areas shared
• Management corporation
• Monthly maintenance fees

Individual Title:

• For landed property
• Full land ownership
• No shared areas
• Owner responsible for maintenance

Property Purchase Process

Step 1: Property Search

Finding Properties:

• Property portals (PropertyGuru, iProperty)
• Real estate agents
• Developer sales galleries
• Property exhibitions
• Direct from owners

Due Diligence:

• Verify ownership
• Check encumbrances
• Inspect property
• Review strata records (if applicable)
• Assess location and amenities

Step 2: Letter of Offer / Booking

Step 3: Sale & Purchase Agreement (SPA)

Timeline: Within 14-21 days of booking

Key Terms:

• Purchase price
• Payment schedule
• Completion date
• Conditions
• Warranties

Signing Process:

1. Lawyer prepares SPA
2. Review all terms
3. Sign SPA
4. Pay stamp duty
5. Pay 10% deposit (less booking)

Step 4: State Consent Application

For Foreigners:

• Submit application to state authority
• Processing: 3-6 months
• Fee: Varies by state
• Approval required before completion

Step 5: Loan Application (if applicable)

Process:

1. Submit loan application
2. Bank valuation
3. Loan approval
4. Loan documentation
5. Disbursement

Timeline: 4-8 weeks

Step 6: Balance Payment

Payment Schedule (Typical):

For Under-Construction:

• Progressive payments based on construction stages
• Typically 10% stages

Step 7: Transfer of Ownership

Process:

1. Prepare transfer documents
2. Pay stamp duty on transfer
3. Register with land office
4. Receive title/strata title

Timeline: 2-6 months after full payment

Step 8: Key Collection

Final Steps:

• Final inspection
• Meter readings
• Key handover
• Defect inspection (new property)

Timeline Summary

Purchase Costs Breakdown

Stamp Duty on Transfer

Example Calculation (RM1,500,000 property):

• First RM100,000: RM1,000
• Next RM400,000: RM8,000
• Next RM500,000: RM15,000
• Next RM500,000: RM20,000
• Total: RM44,000

Legal Fees

Plus:

• Disbursements: RM500-2,000
• GST: 8% on legal fees

State Consent Fee

Foreign Levy (where applicable)

Loan-Related Costs

Total Purchase Costs Summary

For a RM1,500,000 property:

Ongoing Costs

Annual Costs:

Real Property Gains Tax (RPGT)

Tax on profit when selling property:

Exemptions:

• First RM10,000 of gain
• 10% of gain (whichever higher)
• Once-in-lifetime exemption (Malaysians)

Rental Income Tax

Deductible Expenses:

• Assessment tax
• Quit rent
• Interest on loan
• Repairs and maintenance
• Agent fees
• Insurance

Mortgage Options for Foreigners

Availability

Foreigners can obtain mortgages in Malaysia, but with more restrictions than locals.

Loan-to-Value (LTV) Ratios

Interest Rates

Types:

• Base Rate (BR) - Bank's base lending rate
• Spread - Additional margin
• Effective Rate - BR + Spread

Typical Rates (2024):

Banks Offering Foreign Mortgages

Local Banks:

• Maybank
• CIMB
• Public Bank
• Hong Leong Bank
• RHB Bank

International Banks:

• HSBC
• Standard Chartered
• OCBC
• UOB

Loan Requirements

Documents Required:

Personal:

• Passport (all pages)
• Visa/work permit
• Proof of address
• Employment letter
• Income documents (3-6 months)
• Bank statements (6 months)
• Tax returns (if applicable)

Property:

• Sale & Purchase Agreement
• Property valuation
• Title search
• Developer documents (if new)

Income Requirements:

Loan Application Process

Step 1: Pre-Approval

• Submit initial documents
• Bank assesses eligibility
• Indicative approval

Step 2: Formal Application

• Complete application form
• Submit all documents
• Property valuation

Step 3: Approval

• Credit assessment
• Approval letter issued
• Terms and conditions

Step 4: Documentation

• Loan agreement
• Mortgage documents
• Insurance requirements

Step 5: Disbursement

• Upon completion of purchase
• Progressive (under construction)
• Full (completed property)

Timeline: 4-8 weeks typically

Alternative Financing

Cash Purchase:

• No financing needed
• Faster completion
• No interest costs
• Full ownership immediately

Developer Financing:

• Some developers offer schemes
• May have special rates
• Limited availability

Home Country Financing:

• Borrow against assets at home
• May have better rates
• Currency risk

Tips for Foreign Buyers

1. Shop around - Compare multiple banks
2. Prepare documents - Have everything ready
3. Consider currency - Plan for exchange rate changes
4. Factor all costs - Include fees in budget
5. Get pre-approval - Know your budget before searching

Top Investment Locations

Kuala Lumpur

KLCC / City Centre

Price Range: RM800-3,000 psf

Rental Yield: 3-5%

Pros:

• Prime location
• Iconic address
• Strong rental demand
• International tenants

Cons:

• High entry price
• Oversupply concerns
• Lower yields

Mont Kiara

Price Range: RM600-1,200 psf

Rental Yield: 4-6%

Pros:

• Established expat area
• International schools nearby
• Good amenities
• Strong rental market

Cons:

• Traffic congestion
• Aging developments
• Competition

Bangsar

Price Range: RM700-1,500 psf

Rental Yield: 3-5%

Pros:

• Mature neighborhood
• Excellent amenities
• Near city center
• Lifestyle location

Cons:

• High prices
• Limited new supply
• Parking issues

Penang

Georgetown

Price Range: RM400-800 psf

Rental Yield: 4-6%

Pros:

• UNESCO heritage
• Tourism appeal
• Lower prices than KL
• Lifestyle destination

Cons:

• Smaller market
• Limited new developments
• Traffic issues

Tanjung Bungah / Gurney

Price Range: RM500-1,000 psf

Rental Yield: 4-6%

Pros:

• Seafront location
• Expat-friendly
• Good amenities
• Beach access

Cons:

• Higher prices for seafront
• Traffic congestion
• Limited land

Johor Bahru

Iskandar Malaysia

Price Range: RM300-700 psf

Rental Yield: 3-5%

Pros:

• Near Singapore
• Lower prices
• Development potential
• Special economic zone

Cons:

• Oversupply issues
• Dependent on Singapore
• Infrastructure developing

Other Notable Areas

Kota Kinabalu (Sabah):

• Lower minimum threshold
• Tourism potential
• Growing market
• Nature appeal

Langkawi:

• Duty-free island
• Tourism-driven
• Lower threshold
• Lifestyle investment

Cameron Highlands:

• Cool climate
• Retirement appeal
• Limited supply
• Niche market

Investment Comparison

Understanding Rental Yields

Gross Rental Yield

Formula: (Annual Rent / Property Price) x 100

Example:

• Property Price: RM1,000,000
• Monthly Rent: RM4,000
• Annual Rent: RM48,000
• Gross Yield: 4.8%

Net Rental Yield

Formula: ((Annual Rent - Expenses) / Property Price) x 100

Typical Expenses:

• Maintenance fees
• Assessment tax
• Quit rent
• Insurance
• Repairs
• Agent fees
• Vacancy allowance

Example:

• Annual Rent: RM48,000
• Annual Expenses: RM12,000
• Net Rent: RM36,000
• Net Yield: 3.6%

Rental Yields by Location

Rental Yields by Property Type

Factors Affecting Rental Yield

Location:

• Proximity to transport
• Near business districts
• Access to amenities
• School catchment

Property Features:

• Size and layout
• Condition and age
• Facilities
• Parking

Market Conditions:

• Supply and demand
• Economic conditions
• Expat population
• Corporate tenants

Rental Market Overview

Tenant Types:

Rental Process:

1. Marketing - List on portals, use agents
2. Viewing - Show property to prospects
3. Screening - Verify tenant credentials
4. Agreement - Sign tenancy agreement
5. Deposit - Collect security deposit
6. Handover - Property inspection, keys

Typical Rental Terms:

Maximizing Rental Returns

Property Selection:

• Choose high-demand locations
• Consider tenant preferences
• Assess competition
• Factor in all costs

Property Management:

• Maintain property well
• Respond to tenant needs
• Regular inspections
• Professional management (optional)

Pricing Strategy:

• Research market rates
• Price competitively
• Consider incentives
• Review periodically

Tenant Retention:

• Good communication
• Prompt maintenance
• Fair treatment
• Reasonable rent increases

Property Law in Malaysia

Land Ownership System

Malaysia uses the Torrens system of land registration:

• Title registered with land office
• Indefeasible title (protected)
• Clear ownership records
• Government guarantee

Types of Land Title

Important Legal Documents

Sale & Purchase Agreement (SPA)

Key clauses to review:

• Purchase price and payment terms
• Completion date
• Conditions precedent
• Warranties and representations
• Default provisions
• Dispute resolution

Deed of Assignment

For properties without individual title:

• Transfers beneficial interest
• Pending issuance of strata title
• Additional documentation required

Memorandum of Transfer (MOT)

For titled properties:

• Official transfer document
• Registered with land office
• Stamp duty payable

State Consent

Requirements:

• All foreign purchases
• Application to state authority
• Processing fee
• 3-6 months processing

Conditions may include:

• Property must be for own use
• Cannot rent out (some states)
• Minimum holding period
• Other restrictions

Due Diligence Checklist

Title Search:

• [ ] Verify ownership
• [ ] Check encumbrances
• [ ] Confirm land status
• [ ] Review caveats

Property Inspection:

• [ ] Physical condition
• [ ] Structural issues
• [ ] Defects
• [ ] Compliance with plans

Legal Review:

• [ ] SPA terms
• [ ] Developer track record
• [ ] Outstanding issues
• [ ] Strata management

Financial:

• [ ] All costs calculated
• [ ] Financing arranged
• [ ] Funds available
• [ ] Currency considerations

Common Legal Issues

Abandoned Projects:

• Developer financial problems
• Incomplete construction
• Buyer protection limited
• Legal recourse available

Defects:

• Defect liability period (24 months)
• Developer responsible
• Document all defects
• Pursue rectification

Strata Issues:

• Management disputes
• Maintenance arrears
• Common area problems
• Sinking fund adequacy

Title Issues:

• Delayed title issuance
• Encumbrances
• Boundary disputes
• Conversion issues

Dispute Resolution

Options:

• Negotiation
• Mediation
• Tribunal for Housing (buyers)
• Court action

Housing Tribunal:

• For residential property disputes
• Claims up to RM50,000
• Faster than courts
• Lower costs

Engaging a Lawyer

When to Engage:

• Before signing SPA
• For due diligence
• Complex transactions
• Dispute resolution

Choosing a Lawyer:

• Property law experience
• Foreign buyer experience
• Clear fee structure
• Good communication

Typical Legal Fees:

• Based on property value
• Scale fees regulated
• Disbursements additional
• GST applicable

Before Buying

Research Phase

Market Research:

• Study price trends
• Understand supply/demand
• Compare locations
• Assess rental potential

Location Assessment:

• Visit multiple times
• Different times of day
• Talk to residents
• Check future developments

Developer Research:

• Track record
• Financial stability
• Quality of past projects
• Customer reviews

Financial Planning:

• Calculate total costs
• Arrange financing
• Plan for currency exchange
• Budget for ongoing costs

Property Selection

New vs Resale

Key Considerations:

• Location and accessibility
• Developer/seller reputation
• Property condition
• Future development plans
• Rental potential
• Exit strategy

Viewing Checklist:

• [ ] Overall condition
• [ ] Natural lighting
• [ ] Ventilation
• [ ] Storage space
• [ ] Parking
• [ ] Facilities
• [ ] Security
• [ ] Noise levels
• [ ] Neighbors
• [ ] Management quality

Negotiation Tips

For Resale:

• Research comparable sales
• Understand seller motivation
• Start below asking price
• Be prepared to walk away
• Include conditions

For New:

• Ask for discounts
• Request upgrades
• Negotiate payment terms
• Bundle with furniture
• Early bird discounts

Common Mistakes to Avoid

1. Not doing due diligence - Always verify everything
2. Rushing the decision - Take your time
3. Ignoring total costs - Factor in all expenses
4. Overleveraging - Don't overextend financially
5. Emotional buying - Stay objective
6. Skipping legal review - Always use a lawyer
7. Ignoring location - Location is key
8. Not planning exit - Know how you'll sell

After Purchase

Immediate Steps:

• Complete all payments
• Obtain keys
• Transfer utilities
• Arrange insurance
• Set up maintenance

For Rental:

• Prepare property
• List for rent
• Screen tenants
• Sign agreement
• Manage property

For Own Use:

• Move in or renovate
• Register with management
• Set up services
• Join community

Long-Term Management

Property Maintenance:

• Regular inspections
• Preventive maintenance
• Address issues promptly
• Keep records

Financial Management:

• Track income/expenses
• Pay taxes on time
• Review insurance
• Plan for major repairs

Market Monitoring:

• Track property values
• Monitor rental rates
• Stay informed on regulations
• Plan for future

Official Resources

Government Agencies

Land Offices (State)

• Handle title registration
• State consent applications
• Land searches

Valuation and Property Services Department (JPPH)

• Website: www.jpph.gov.my
• Property market reports
• Valuation services

Ministry of Housing (KPKT)

• Website: www.kpkt.gov.my
• Housing policies
• Developer licensing

Real Estate and Housing Developers' Association (REHDA)

• Website: www.rehda.com
• Developer directory
• Industry information

Property Portals

Professional Services

Real Estate Agents

• Must be registered with BOVAEA
• Board of Valuers, Appraisers, Estate Agents and Property Managers
• Website: www.lppeh.gov.my

Lawyers

• Malaysian Bar Council
• Website: www.malaysianbar.org.my
• Find property lawyers

Valuers

• Registered with BOVAEA
• For property valuation
• Required for financing

Banks

• Major banks offer mortgages
• Compare rates and terms
• Consider foreign-friendly banks

Useful Contacts

Property Investment Resources

Market Reports:

• JPPH Property Market Report
• NAPIC (National Property Information Centre)
• Bank Negara reports
• Private research firms

News & Information:

• The Edge Property
• Property Insight
• iProperty.com.my news
• PropertyGuru news

Investment Guides:

• MIDA investment guides
• State investment agencies
• Chamber of commerce resources

Checklist Summary

Before Buying:

• [ ] Research market thoroughly
• [ ] Understand foreigner rules
• [ ] Calculate all costs
• [ ] Arrange financing
• [ ] Engage lawyer

During Purchase:

• [ ] Conduct due diligence
• [ ] Review all documents
• [ ] Apply for state consent
• [ ] Complete payments
• [ ] Transfer ownership

After Purchase:

• [ ] Obtain keys and title
• [ ] Set up utilities
• [ ] Arrange insurance
• [ ] Manage property
• [ ] Monitor market

Key Reminders:

1. Verify everything - Don't take anything at face value
2. Use professionals - Lawyers, agents, valuers
3. Understand costs - All-in budget
4. Plan long-term - Property is illiquid
5. Stay compliant - Follow all regulations
6. Keep records - Document everything
7. Be patient - Process takes time
8. Seek advice - When in doubt, ask experts