Authored by the expert who managed and guided the team behind the Malaysia Property Pack
Everything you need to know before buying real estate is included in our Malaysia Property Pack
Yes, foreigners can legally buy property in Malaysia without the MM2H visa program.
The MM2H (Malaysia My Second Home) program is completely optional for property ownership, though it offers additional benefits for long-term residents. As of June 2025, foreign property buyers must meet state-specific minimum price thresholds ranging from RM500,000 to RM3,000,000 depending on location and property type, obtain state authority approval, and pay a flat 4% stamp duty on property transfers.
If you want to go deeper, you can check our pack of documents related to the real estate market in Malaysia, based on reliable facts and data, not opinions or rumors.
Foreigners can purchase condominiums, landed properties, and commercial real estate in Malaysia without MM2H, subject to state-specific minimum price requirements and approval processes.
Property ownership requires state authority consent, payment of 4% stamp duty, and compliance with restrictions on Malay Reserved Land and low-cost housing units designated for Bumiputera interests.
| Aspect | Requirement/Details | Cost/Threshold |
|---|---|---|
| Property Types Allowed | Condominiums, landed properties, commercial units | Varies by state and type |
| Minimum Price (Kuala Lumpur) | Both landed and high-rise properties | RM1,000,000 |
| Minimum Price (Selangor) | Landed/High-rise properties | RM2,000,000/RM1,500,000 |
| Minimum Price (Penang Island) | Landed/High-rise properties | RM3,000,000/RM1,000,000 |
| Stamp Duty | Flat rate for all foreigners | 4% of property value |
| State Approval | Required for all foreign purchases | Processing fees vary |
| Mortgage Availability | Available from select Malaysian banks | 60-80% loan-to-value ratio |
What types of properties can foreigners legally purchase in Malaysia?
Foreigners can legally purchase a wide range of property types in the Malaysian real estate market without any visa requirements.
The permitted property categories include high-rise residential units such as condominiums and apartments, landed properties including bungalows, semi-detached houses, and terrace houses, commercial properties like shops and offices, and industrial properties. Each property type is subject to state-specific minimum price thresholds and approval requirements.
However, foreign buyers face several restrictions that completely prohibit certain property categories. Properties on Malay Reserved Land are strictly off-limits to non-Malaysian citizens, as are low-cost and medium-cost residential units specifically designated by state authorities for local buyers. Properties allocated for Bumiputera interests cannot be purchased by foreigners, and agricultural land requires special approval from state authorities, which is rarely granted.
As of June 2025, these restrictions remain firmly in place across all Malaysian states, with no indication of policy changes that would expand foreign access to restricted property categories.
It's something we develop in our Malaysia property pack.
Are there specific states in Malaysia with different rules for foreign property buyers?
Yes, Malaysia operates a decentralized property ownership system where each state sets its own rules, minimum price thresholds, and restrictions for foreign buyers.
The variation between states is significant, with some imposing much higher barriers than others. For example, Penang Island requires a minimum of RM3,000,000 for landed properties compared to Sarawak's RM500,000 threshold. Some states like Selangor only allow foreigners to purchase landed properties within gated and guarded communities with strata titles, while others permit freehold landed property purchases without such restrictions.
Johor has special economic zones like Medini in Iskandar Malaysia where different rules apply, often with more favorable conditions for foreign investors. States in East Malaysia, particularly Sabah and Sarawak, generally have lower minimum price requirements but may have additional approval processes due to their unique constitutional status.
State governments can change these rules at any time, and as we reach mid-2025, several states are reviewing their foreign ownership policies in response to local housing affordability concerns and foreign investment flows.
What is the minimum property price threshold for foreigners in each state?
| State/Region | Landed Property (RM) | High-Rise/Strata (RM) |
|---|---|---|
| Kuala Lumpur | 1,000,000 | 1,000,000 |
| Selangor (Zone 1/2) | 2,000,000 | 1,500,000 |
| Johor (International zones) | 2,000,000 | 1,000,000 |
| Penang Island | 3,000,000 | 1,000,000 |
| Penang Mainland | 1,000,000 | 500,000 |
| Malacca | 1,000,000 | 500,000 |
| Sabah | 1,000,000 | 600,000 |
| Sarawak | 500,000 | 500,000 |
Can a foreigner buy landed property or is it limited to high-rise and strata-titled properties?
Foreigners can purchase both landed properties and high-rise strata-titled properties in Malaysia, though landed property purchases face more restrictions and higher price thresholds.
Most states allow foreign purchase of landed properties including bungalows, semi-detached houses, and terrace houses, but with significant conditions. In Selangor, foreigners can only buy landed properties within gated and guarded communities that have strata titles, effectively excluding traditional freehold landed houses. The minimum price for landed properties is typically higher than for high-rise units in the same state.
High-rise properties including condominiums, apartments, and strata-titled developments are generally more accessible to foreign buyers, with lower minimum price thresholds and fewer restrictions. These properties come with strata titles that provide clear ownership rights and are easier to finance through Malaysian banks.
Agricultural land remains largely off-limits to foreigners unless they obtain special approval from state authorities, which is rarely granted for residential purposes. As of June 2025, no state has completely banned foreign ownership of landed residential property, though some have made it practically difficult through high price thresholds and location restrictions.
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Is it possible to buy property in Malaysia as an individual without forming a company or using a nominee?
Yes, foreign individuals can purchase property directly in Malaysia without forming a company or using nominee arrangements.
The Malaysian property law allows foreign individuals to own property in their personal name, provided they meet all legal requirements including minimum price thresholds and obtain state authority approval. This direct ownership model is actually preferred by most foreign buyers as it provides clearer title and fewer legal complications compared to corporate ownership structures.
Using nominee arrangements, where a Malaysian citizen holds property on behalf of a foreigner, is technically legal but carries significant risks and is generally discouraged by legal professionals. Such arrangements can lead to disputes and potential loss of the property if the nominee decides to claim ownership.
Corporate ownership through a Malaysian company is possible but requires foreigners to comply with Malaysia's company ownership rules, where foreign shareholding is limited in certain sectors. For residential property investment, individual ownership remains the most straightforward and secure option for foreign buyers.
It's something we develop in our Malaysia property pack.
Are there any ownership restrictions or approval processes foreigners need to go through before purchasing?
All foreign property purchases in Malaysia require mandatory approval from the relevant state authority before the transaction can be completed.
The approval process involves submitting a formal application to the state government along with supporting documents including passport copies, proof of funds, the signed Sale & Purchase Agreement, and evidence of compliance with minimum price requirements. Processing times vary by state but typically take 3-6 months, and approval is not guaranteed even if all requirements are met.
Beyond state approval, foreigners face ownership restrictions that permanently prohibit purchase of certain property types. Malay Reserved Land, which comprises significant portions of land in peninsular Malaysia, cannot be sold to non-Malays regardless of citizenship status. Low-cost and medium-cost housing units designated by state authorities for local buyers are also off-limits to foreigners.
Properties allocated for Bumiputera interests, which includes various affordable housing schemes and certain commercial developments, cannot be purchased by foreign buyers. Additionally, some states impose quota systems limiting the percentage of units in certain developments that can be sold to foreigners, typically ranging from 30-50% of total units.
What taxes, fees, and stamp duties must a foreigner pay when buying property in Malaysia?
Foreign property buyers in Malaysia face a flat 4% stamp duty on property transfers, regardless of the property value, which represents a significant cost compared to local buyers who enjoy progressive rates.
Legal fees typically range from 1% to 1.25% of the purchase price and cover the conveyancing process, title transfer, and legal documentation. These fees are standardized by the Malaysian Bar Council and apply to both local and foreign buyers. If financing the purchase, buyers must pay an additional 0.5% stamp duty on the loan agreement amount.
Several states impose additional levies specifically on foreign buyers. Johor charges a 2% state levy on foreign purchases with a minimum of RM20,000, while other states may have different levy structures. Property valuation fees, typically RM500-2,000 depending on property value, are required for mortgage applications and some state approvals.
Real estate agent commissions, usually 1-3% of the purchase price, along with miscellaneous costs including title search fees, insurance, and administrative charges, can add another 1-2% to the total transaction cost. As of June 2025, these fee structures remain stable with no major changes expected in the near term.
Can a foreigner get a mortgage from a Malaysian bank or must they pay in cash?
Foreigners can obtain mortgages from Malaysian banks, though not all financial institutions offer this service and requirements are typically stricter than for local buyers.
- Major banks offering foreign mortgages: Maybank, CIMB Bank, Public Bank, RHB Bank, and Hong Leong Bank actively provide financing to qualified foreign buyers
- Loan-to-value ratios: Most banks offer 60-80% financing for foreign buyers, compared to up to 90% for Malaysian citizens
- Income requirements: Minimum monthly income typically ranges from RM10,000-20,000, with some banks requiring higher thresholds for non-residents
- Employment documentation: Valid employment pass for those working in Malaysia, or proof of overseas employment and income stability
- Credit assessment: Good credit history in home country and Malaysia (if applicable), with some banks requiring credit reports from international agencies
Interest rates for foreign borrowers are typically 0.5-1% higher than rates offered to Malaysian citizens, with current rates ranging from 4.5-6.5% annually as of June 2025. Loan tenure is usually limited to 25-30 years, and some banks require foreign borrowers to maintain a Malaysian bank account with minimum balance requirements.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Malaysia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Is rental income from Malaysian property taxable for foreigners, and if so, how?
Rental income from Malaysian properties is subject to taxation for foreign owners, with rates depending on the owner's residency status for tax purposes.
Non-resident foreign property owners pay a flat 30% tax rate on net rental income after allowable deductions. This rate applies regardless of the income amount and is significantly higher than rates for Malaysian tax residents. Foreign owners who qualify as Malaysian tax residents by staying in the country for more than 182 days per year are subject to progressive tax rates ranging from 0% to 30%, similar to local citizens.
Allowable deductions from gross rental income include property management fees, maintenance costs, repair expenses, insurance premiums, assessment taxes, and mortgage interest payments. These deductions can significantly reduce the taxable income base, making proper record-keeping essential for tax optimization.
Rental income tax must be filed annually by April 30th of the following year, and foreign owners are required to appoint a tax agent if they are non-residents. Withholding tax may apply in certain circumstances, particularly for non-resident owners, where tenants or property management companies must deduct tax at source before paying rent to the owner.
What is the process for selling property as a foreigner, and are there capital gains taxes?
Foreign property owners can sell their Malaysian properties freely, subject to market conditions and obtaining state authority approval for the title transfer to the new buyer.
The selling process involves appointing a real estate agent, obtaining a property valuation, negotiating with buyers, and completing legal documentation through a qualified lawyer. The buyer must also obtain state approval if they are foreign, which can affect the timeline and success of the sale. Marketing to Malaysian buyers is often easier as they don't require approval, potentially resulting in faster transactions.
As of January 2024, Malaysia implemented a new Capital Gains Tax (CGT) system that applies to property sales by both residents and foreigners. This replaced the previous Real Property Gains Tax (RPGT) system and covers a broader range of capital assets. The CGT rate and calculation method depend on factors including the holding period, property type, and total capital gains realized.
For properties held for investment purposes, the CGT applies to the profit margin between purchase and sale prices, after accounting for allowable deductions such as renovation costs, legal fees, and property taxes paid during ownership. The exact tax rate structure is still being refined by Malaysian tax authorities as of mid-2025, with different rates potentially applying based on holding periods and total annual capital gains.
It's something we develop in our Malaysia property pack.
Is the MM2H visa program required for property ownership, or is it purely optional?
The MM2H (Malaysia My Second Home) visa program is completely optional for foreign property ownership and is not required to purchase real estate in Malaysia.
Foreign individuals can buy property under standard foreign ownership rules without any visa or residency status, provided they meet state-specific minimum price thresholds and obtain necessary approvals. The MM2H program offers additional benefits for long-term residents but does not grant special property ownership rights beyond what is already available to non-resident foreign buyers.
However, as of 2024, the revised MM2H program actually requires participants to purchase property as part of their eligibility criteria, reversing the traditional relationship where the visa helped with property buying. The new MM2H requirements include mandatory property investment of at least RM600,000, making it more of a property-linked residency program rather than a pathway to property ownership.
The MM2H program does provide other benefits including long-term residency, multiple entry privileges, and potential tax advantages for participants who qualify as Malaysian tax residents. For pure property investment purposes without long-term residency intentions, most foreign buyers find the standard foreign ownership route more cost-effective and simpler than pursuing MM2H status.
Are there other visa or residency options that offer better property rights or benefits in Malaysia?
Malaysia offers several alternative visa and residency programs that provide different benefits for property investors, though none significantly expand property ownership rights beyond standard foreign buyer privileges.
| Program | Duration | Property Benefits |
|---|---|---|
| Premium Visa Program (PVIP) | 20 years, renewable | Standard foreign ownership rights, no minimum stay requirement |
| MM2H 2.0 | 5-20 years | Requires mandatory property purchase, no special ownership rights |
| Malaysia Digital Nomad Pass | 12 months, renewable | Standard foreign ownership rights for digital professionals |
| Residence Pass-Talent (RP-T) | 10 years | Standard foreign ownership rights for skilled professionals |
| Social Visit Pass (Long-term) | 5 years | Standard foreign ownership rights, family-based |
The Premium Visa Program (PVIP) is particularly attractive for high-net-worth individuals as it offers a 20-year renewable visa with no minimum stay requirements, allows work and business activities, and permits property purchase under standard foreign ownership rules. The PVIP requires a higher financial commitment but provides greater flexibility than MM2H.
None of these programs provide access to Malay Reserved Land, low-cost housing, or other restricted property categories that are off-limits to all foreigners regardless of visa status. The primary advantage of long-term residency programs is potential qualification as a Malaysian tax resident, which can reduce rental income tax rates from 30% to progressive rates starting at 0%.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Foreign property ownership in Malaysia operates under a state-by-state regulatory framework that allows significant investment opportunities without requiring visa sponsorship or residency status.
The key to successful property investment lies in understanding state-specific requirements, securing proper financing, and navigating the approval processes that can vary significantly between locations like Kuala Lumpur's standardized RM1 million threshold and Penang's RM3 million requirement for landed properties.
Sources
- iProperty Malaysia - Complete Guide for Foreigners
- HousingWatch Malaysia - Foreigner Property Guide 2025
- EmerHub - Buying Property in Malaysia
- FAR Academy - Minimum Property Prices 2025
- Low Partners - Foreign Property Purchase Guidelines
- Titijaya - Foreign Property Investment Guide
- OrangeTee - Malaysian Property Buying Guide
- Azmi Law - Capital Gains Tax Malaysia
-Average House Prices in Malaysia: Complete Market Analysis
-Average Maintenance Fees for Condos in Malaysia
-Can Foreigners Buy Property in Johor Bahru: Complete Guide
-Foreign Property Investment in Kuala Lumpur
-Malaysia Property Price Forecasts and Market Trends