Are you considering buying property in Malaysia as a foreigner? Let me walk you through my personal experience—from finding the perfect home to navigating the legal and financial processes. I’ll share insights that can help you make informed decisions.
Why Malaysia?
Malaysia is a hidden gem for property investors. With its affordable luxury, world-class amenities, and stunning landscapes, it’s no wonder more foreigners are choosing to call this country home. I chose Malaysia for its unique blend of urban convenience and rural tranquility. Plus, the property market here offers excellent value for money compared to many other countries.
Choosing the Right Location
When buying property in Malaysia, location is key. As a foreigner, you’ll need to be aware of minimum purchase prices, which vary by area:
Kuala Lumpur (KL), Selangor, and Cyberjaya: Minimum purchase price for foreigners is RM 2 million.
Other states (like Penang, Malacca): Minimum purchase price for landed property is RM 1 million, while condominiums can be purchased for RM 500,000 and above.
The Buying Process: Step-by-Step:
Here’s a breakdown of property purchase journey in Malaysia:
1. Finding the Right Property
Engaged with a Local Property agent. Property Agent will charged 1% of the purchase price as a fee. If you’re not familiar with the market, I highly recommend working with a trusted agent.
2. Negotiating the Price
Local Agent will bring you to view several properties, Once you decided on the property you are going to purchased, then start the negotiating process. Let’s say the purchase price was RM 1.1 million. After negotiation, it was reduced to RM1.04 million. Once both parties agreed on the price, a Letter of Intent (LOI) was issued, and paid a RM 3,359 deposit to secure the property.
3. Legal and Approval Fees
Next, hired a solicitor to handle the legal paperwork. The approval fee was RM 30,300, which included the Sales and Purchase Agreement (S&P). This document is crucial—it’s like exchanging contracts and legally binds both parties to the transaction.
4. Foreign Investor Checks
As a foreign buyer, you may need to undergo a background check to ensure you are not involved in money laundering or fraud. This process, known as the Foreign Investment Committee (FIC) check, took about three months. It’s a standard procedure for all foreign property purchases in Malaysia.
5. Financing the Purchase
If you’re not buying in cash, you can apply for a mortgage from local banks. Interest rates in Malaysia are relatively low, typically ranging from 3.6% to 3.9%.
6. Additional Costs
Be prepared for extra expenses, such as:
Stamp duty: RM 42,420 (paid to the land office).
State-specific taxes: If there is any.
7. Finalizing the Purchase
The entire process took about 10 months, from the initial deposit to finalizing the purchase. Once all payments were made, you will received Vacant Possession (VP), which is mean you can move in to the property already.
Tips for Foreign Buyers
Work with a Local Agent: A good agent can save you time, money, and stress.
Understand the Costs: Beyond the purchase price, factor in legal fees, taxes, and stamp duty.
Be Patient: The process can take several months, especially with foreign investor checks.
Consider Financing: Even if you’re paying in cash, explore mortgage options to maximize your budget.
Ready to Start Your Property Journey?
Whether you’re a local or a foreigner, Malaysia’s property market offers incredible opportunities. If you have any questions or need guidance, feel free to comment below or contact me directly. Let’s make your dream of owning a home in Malaysia a reality!
