2) Rules for Foreign Buyer &Mortgage Loan

1. Overview

Malaysia is unique country among Southeast Asian countries that allows foreigners to own several categories of properties in Malaysia. On top of high rise dwelling (condominiums), foreigners could enjoy the flexibility to purchase landed houses, commercial shop buildings, warehouses, offices, factories, and commercial land (excluding agricultural land).

In addition, foreign buyers is able to register that house under their own name (doesn’t require a nominee), and, also use the property as the collateral for bank loans in Malaysia. Foreigners are eligible to obtain a loan in Malaysia (Local & foreign banks).

Basically, the regulations for foreign buyers are as follows:
1) Price regulation (Minimum property price)
2) Bumiputera Property (For Malaysian Muslim buyers only)
This restricted property category is reserved for Malaysian Malay Community
3) State Consent
When a foreigner purchases a property, it is required to obtain state consent from the respective state government where the property is located.

2. Price regulation

The general minimum property prices that is allowed for foreigners to purchase is set from RM1 million. However, land regulations are the prerogative of each state government, therefore, the foreigners' minimum purchase prices and detailed rules vary from state to state.

In the case of Kuala Lumpur, it is possible to purchase any number of properties for a minimum price of RM1 million or more. However, in the neighbouring state of Selangor, only strata properties ( high rise dwelling) with a minimum of RM2 million or more can be purchased.

In Johor, minimum property purchase price is from RM500,000 and for properties located in the special economic zone known as "Medini" , there is no minimum price restriction.

In Penang, there is also a rule that those with MM2H visa (long-term stay visa) can purchase 2 properties with a minimum price of RM500,000 or more.
Purchasers without MM2H visa is requires to purchase property price from RM1 million (for strata properties ? high rise dwelling ) and RM2 Million for landed house.

These regulations are subject to change depending on the real estate market and
economic conditions. Please contact us for details.

3. Obtaining state consent from the state government

When a foreigner intends to purchase a property in Malaysia, he or she is required to obtain state consent from the state government where the property is located, which is usually applied through a local lawyer. Condominiums in the city centre or the suburbs, which are usually purchased by foreigners, can be purchased without any problems, however the approval timeline usually take one to two months.

In terms of state consent application, it will take place after the deposit down payment of the property has been paid, and the balance purchase price to be paid after the approval is obtained. In the event that purchaser is unable to obtain the state consent’s approval from the state government, full refund the deposit down payment will be given.

4. Mortgage

Malaysia is one of the rare countries where foreigners can get a mortgage from a local bank using local real estate as collateral. (Unfortunately, there is no situation where a Japanese bank will give you a loan with local real estate as collateral).

Generally, the terms and conditions of the loan are, the applicant's age must be:
1. 65 years or younger and the repayment term must be 30 years or until the borrower turns 65 years old, whichever is shorter.
2. Applicant’s monthly income and place of employment,

For a senior citizen who is considering to apply for a mortgage, it is suggested to apply for a mortgage jointly with your child, so that the repayment terms can determined by the younger applicant’s age.

The loan to property value is approximately 50-60% of the property price for foreigners who do not have a local stay visa (MM2H visa, work visa, etc.). For MM2H visa applicant, purchaser can obtain up to 60-70% loan of the property market value. Therefore, it can be said that younger applicant with MM2H visas or expatriates with Malaysian employment visas have the advantage of obtaining a mortgage loan.

We also provide support for mortgage application, kindly contact us for details.