How to invest in property in Malaysia?

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

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Malaysia. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Malaysian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Kuala Lumpur, Penang, and Johor Bahru. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Is it actually easy or difficult for a foreigner to invest in property in Malaysia compared to Western countries?

Malaysia is generally easier for foreign property investment than most Western countries and many Asian markets.

Unlike countries such as Australia or New Zealand that have implemented heavy foreign buyer taxes (up to 25% in some cases), Malaysia maintains relatively straightforward regulations with reasonable minimum investment thresholds of RM 1-2 million depending on the state.

The process is more streamlined than Singapore's additional buyer stamp duty system and Thailand's complex land ownership restrictions. Malaysia allows foreigners to own freehold property outright, which is not possible in countries like Thailand where foreign land ownership is prohibited.

However, Malaysia does have state-specific rules and minimum price requirements that vary by location - Selangor and Johor require RM 2 million for landed properties while most other states require RM 1 million.

The regulatory environment is stable and well-established, making it significantly more accessible than markets with frequent policy changes.

What types of properties can foreigners legally buy, and which ones are off-limits?

Foreigners can purchase most high-value residential and commercial properties in Malaysia with specific restrictions.

**Allowed Property Types:**1. High-rise residential units (condominiums, apartments) above minimum price thresholds2. Landed properties (bungalows, semi-detached houses, townhouses) meeting state-specific minimum values3. Commercial properties including office buildings, retail spaces, and warehouses4. Industrial properties for business purposes5. Mixed-use developments combining residential and commercial elements**Prohibited Property Types:**1. Properties below minimum price thresholds (RM 1-2 million depending on state)2. Malay Reserved land designated for indigenous ownership3. Low-cost and medium-cost housing units allocated for Malaysian citizens4. Bumiputera lots reserved for ethnic Malay and indigenous buyers5. Certain heritage properties with cultural significance restrictions

It's something we develop in our Malaysia property pack.

What is the step-by-step process of buying a property in Malaysia from start to finish?

The Malaysian property purchase process follows a structured timeline with clear legal requirements.

The process typically begins with securing financing or preparing cash funds, followed by engaging a qualified lawyer for conveyancing services to ensure legal compliance.

Step	Action Required	Typical Timeline
1. Preparation	Secure financing/cash, check credit reports (CCRIS/CTOS)	1-2 weeks
2. Legal Setup	Engage reputable lawyer for conveyancing	3-5 days
3. Property Search	Find property, view, make offer with Letter of Intent	2-8 weeks
4. Initial Payment	Pay 2% earnest deposit upon offer acceptance	1-2 days
5. Legal Agreement	Sign Sale & Purchase Agreement (SPA)	2-3 weeks after offer
6. State Approval	Obtain foreign ownership consent (if required)	4-8 weeks
7. Final Payment	Complete payment and execute SPA	1-2 weeks
8. Title Transfer	Legal due diligence, title transfer, pay taxes/fees	4-6 weeks
9. Possession	Receive keys after full payment and registration	1-2 days

What documents are mandatory for foreigners, and which ones are optional but helpful?

Foreign property buyers in Malaysia must prepare both mandatory legal documents and optional supporting materials to facilitate the purchase process.

The mandatory documents ensure legal compliance and ownership transfer, while optional documents can expedite approvals and provide additional security for remote transactions.

**Mandatory Documents:**1. Valid passport with current visa status2. Proof of funds demonstrating financial capability3. Sale & Purchase Agreement (SPA) properly executed4. State consent letter for foreign ownership (where applicable)5. Proof of deposit and balance payment receipts6. Lawyer's authorization and legal fee payment receipts7. Credit reports (CCRIS/CTOS) if applying for mortgage financing**Optional but Helpful Documents:**1. MM2H (Malaysia My Second Home) visa for residency benefits2. Power of attorney for remote purchase transactions3. Lawyer's letter of good standing and professional credentials4. Comprehensive insurance documentation for property protection5. Bank reference letters from home country financial institutions

Can the entire purchase process be completed without physically being in Malaysia?

Yes, foreign buyers can complete the entire Malaysian property purchase process remotely using legal representation and digital documentation.

This remote purchase capability is facilitated through a power of attorney system where a licensed Malaysian lawyer or registered agent acts on the buyer's behalf for all legal proceedings and document signing.

The process requires engaging a reputable, licensed conveyancing lawyer who can handle property viewings via video calls, coordinate with sellers and agents, execute all legal documents, and complete the title transfer process.

However, remote buyers must exercise extreme caution regarding fraud prevention - this includes verifying lawyer credentials through the Malaysian Bar Council, confirming property ownership through official land registry searches, and using secure payment methods with proper documentation.

Many successful remote purchases occur annually, but buyers should budget additional time for document verification and communication delays inherent in long-distance transactions.

What are the typical taxes, fees, and costs involved, and can you give me a clear breakdown?

Malaysian property transactions involve multiple fees and taxes that typically total 4-6% of the property purchase price for foreign buyers.

Cost Type	Amount/Percentage	When Paid
Stamp Duty (Legal Fee)	RM 5,000-30,000+ (tiered by price)	Upon SPA signing
Legal Fees	~1% of property price	SPA signing and completion
Real Estate Agent Fees	2-3% of property price	Upon completion
Property Valuation Fee	0.25% of property price	Before mortgage approval
Foreign Approval Fees	RM 10,000-20,000	State consent application
Real Property Gains Tax (RPGT)	10% (within 5 years), 5% (after 5 years)	Upon resale only
MM2H Application Fee (optional)	RM 5,000-10,000	Visa application process
Insurance Premiums	0.1-0.3% annually	Annual renewal

Is it possible to buy property in cash, and how does that process work?

Cash purchases are not only possible but often preferred in Malaysia as they significantly accelerate the transaction timeline and eliminate financing contingencies.

The cash purchase process requires buyers to demonstrate legitimate source of funds through bank statements, investment account records, or other financial documentation to comply with anti-money laundering regulations.

Buyers pay the initial 2% earnest deposit upon offer acceptance, followed by the remaining 98% balance transfer directly to the seller's account or through the lawyer's trust account before title registration.

Cash transactions typically complete 4-8 weeks faster than mortgage-financed purchases since they bypass bank approval processes, property valuations, and loan documentation requirements.

Foreign buyers using cash must still obtain state approval for ownership where required, but this process runs parallel to other documentation rather than creating additional delays.

Can foreigners get a mortgage in Malaysia, and if so, what are the interest rates, conditions, and tips to improve approval chances?

Malaysian banks actively provide mortgage financing to qualified foreign buyers, though with stricter requirements than domestic applicants.

As of September 2025, foreign buyers can typically secure 70-80% loan-to-value ratios with interest rates ranging from 3-4% depending on the bank, loan amount, and applicant's financial profile.

**Key Mortgage Conditions for Foreigners:**1. Minimum 20-30% down payment requirement2. Strong credit history and income verification from home country3. Debt-to-income ratio typically below 60%4. Employment or business income documentation for past 2-3 years5. Bank relationship or MM2H visa status can improve terms**Tips to Improve Approval Chances:**1. Establish banking relationship with major Malaysian banks (Maybank, CIMB, Public Bank)2. Provide comprehensive income documentation including tax returns3. Consider MM2H visa application for preferential treatment4. Maintain strong credit scores in home country5. Present clear property investment or residence purpose6. Work with mortgage brokers experienced in foreign applications

It's something we develop in our Malaysia property pack.

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.

How reliable are real estate agents in Malaysia, and how can you choose a trustworthy one?

Malaysian real estate agents vary significantly in reliability and professionalism, making careful selection crucial for foreign buyers unfamiliar with local market practices.

Trustworthy agents must be registered with the Board of Valuers, Appraisers, Estate Agents, and Property Managers (BOVAEP), which provides regulatory oversight and complaint mechanisms for client protection.

**Selection Criteria for Reliable Agents:**1. Valid BOVAEP registration and professional license verification2. Minimum 3-5 years experience in foreign client transactions3. Verifiable client references and successful transaction history4. Transparent fee structure with written agreements5. Knowledge of state-specific foreign ownership regulations**Warning Signs to Avoid:**1. Unlicensed agents operating without proper credentials2. Agents pushing properties below legal minimum prices for foreigners3. Pressure tactics or requests for advance fees beyond standard deposits4. Reluctance to provide client references or transaction documentation5. Limited knowledge of foreign buyer legal requirements and processes

Reputable agents typically charge 2-3% commission and provide comprehensive services including property search, legal coordination, and post-purchase support for foreign clients.

How well does the legal system protect foreign buyers, and what precautions should be taken?

Malaysia's legal system provides robust protection for foreign property buyers when proper legal procedures are followed and qualified professionals are engaged.

The country operates under a common law system inherited from British colonial rule, providing familiar legal frameworks for Western buyers and established precedents for property rights protection.

Foreign buyers receive the same legal property rights as Malaysian citizens, including freehold ownership, inheritance rights, and legal recourse through Malaysian courts for disputes or fraud.

**Essential Legal Precautions:**1. Engage licensed conveyancing lawyers registered with the Malaysian Bar Council2. Conduct comprehensive title searches and due diligence on property history3. Verify developer credentials and project approval status for new developments4. Confirm all properties meet foreign ownership eligibility requirements5. Ensure proper insurance coverage for property and transaction protection6. Maintain all transaction documentation for future legal protection**Additional Protection Measures:**1. Use lawyer trust accounts for large payment transfers2. Obtain professional property valuations from certified valuers3. Verify all state approvals and consent letters before completion4. Consider title insurance for additional protection against ownership disputes

What are the most common mistakes and pitfalls foreigners make when buying property in Malaysia?

Foreign buyers frequently make costly errors due to unfamiliarity with Malaysian property regulations and local market practices.

**Most Common Mistakes:**1. **Purchasing Below Legal Minimum Prices** - Attempting to buy properties under RM 1-2 million thresholds, resulting in transaction cancellation and deposit loss2. **Buying Restricted Property Types** - Purchasing Malay Reserved land, Bumiputera units, or low-cost housing that foreigners cannot legally own3. **Inadequate Due Diligence** - Failing to conduct proper title searches, developer verification, or legal reviews before signing agreements4. **Underestimating Total Costs** - Not budgeting for all taxes, fees, and approval costs, which can total 4-6% of purchase price5. **Working with Unregistered Agents** - Engaging unlicensed real estate agents who lack proper credentials and regulatory oversight6. **Remote Purchase Fraud** - Falling victim to property scams when buying remotely without proper lawyer verification7. **Currency Exchange Timing** - Not considering exchange rate fluctuations when transferring large sums for property purchases8. **Ignoring State-Specific Rules** - Assuming uniform regulations across all Malaysian states when requirements vary significantly

These mistakes can result in transaction failures, financial losses, legal complications, and lengthy resolution processes that could have been easily avoided with proper preparation and professional guidance.

How long does the whole buying process usually take, and is there any path to residency or citizenship through property ownership?

The complete Malaysian property purchase process typically requires 3-6 months from initial deposit to final possession, with variations based on property type and approval requirements.

Condominium purchases generally complete faster (3-4 months) while landed property transactions often take 4-6 months due to additional state approval requirements for foreign ownership.

New development purchases from developers may require longer timelines (6-12 months) depending on construction completion schedules and progressive payment structures.

**Timeline Breakdown:**1. Property search and offer acceptance: 2-8 weeks2. SPA signing and legal documentation: 2-3 weeks3. State approval process (if required): 4-8 weeks4. Mortgage approval and documentation: 4-6 weeks5. Final payment and title transfer: 4-6 weeks6. Key handover and possession: 1-2 days**Residency and Citizenship Pathways:**Property ownership in Malaysia does not automatically grant residency or citizenship rights to foreign buyers. However, the Malaysia My Second Home (MM2H) program provides long-term residency options for qualified applicants with property investments.

MM2H visa holders can stay in Malaysia for 10-year renewable periods and may purchase property with reduced restrictions, but the program requires separate application and qualification criteria beyond property ownership.

Malaysian citizenship through naturalization requires continuous residence for 12+ years and meets specific criteria, but property ownership alone does not qualify applicants for citizenship consideration.

It's something we develop in our Malaysia property pack.

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.

Sources

1. InvestAsian - Malaysia Property Investment Guide
2. InvestAsian - Foreign Land Ownership Countries
3. EmerHub - Buying Property in Malaysia
4. PropEasy Asia - Foreign Property Guidelines Malaysia
5. StashAway - Complete Home Buying Guide Malaysia
6. PEPS - Property Purchase Steps Malaysia
7. Nomad Capitalist - Overseas Real Estate Investment
8. EHM - Foreign Investment Malaysia Perspectives