Buying and owning property in Johor as a foreigner

Authored by the expert who managed and guided the team behind the Malaysia Property Pack

Yes, the analysis of Johor's property market is included in our 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 Johor. If you'd like to learn more about us, you can check our presentation page.

What types of properties can foreigners legally buy in Johor, and what are the restrictions compared to locals?

Foreigners can legally purchase high-rise residential units like condominiums, apartments, and serviced apartments above RM1 million, as well as landed properties including bungalows, semi-detached houses, and terrace houses above RM2 million in designated international zones.

The key exception is Medini Iskandar, where foreigners face no minimum price threshold for any property type. Commercial properties are also available to foreigners, typically with minimum values between RM1-2 million depending on the specific area and local regulations.

However, foreigners are completely prohibited from purchasing low-cost and medium-cost housing, Malay Reserved Land, Bumiputera lots, and most agricultural land unless it has been gazetted for development and receives special approval from state authorities.

In contrast, Malaysian citizens and permanent residents face no such restrictions and can purchase any property type at any price point, including agricultural land, low-cost housing, and properties on Malay Reserved Land. This gives locals significantly more flexibility in their property choices and investment opportunities.

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

Are there minimum price thresholds for different property types, and how do they vary across Johor?

Yes, Johor enforces strict minimum price thresholds for foreign buyers that vary significantly by property type and location.

For high-rise strata-titled properties like condominiums and apartments, the minimum threshold is RM1 million throughout most of Johor. Landed properties including two-storey terrace houses, semi-detached homes, bungalows, and cluster houses require a minimum investment of RM2 million, but only in designated international zones.

The major exception is Medini Iskandar, a special economic zone where foreigners can purchase both landed and high-rise properties without any minimum price threshold. This makes Medini particularly attractive for foreign investors with smaller budgets or those seeking entry-level investment opportunities.

Commercial properties generally require minimum investments between RM1-2 million, with specific amounts varying by local council regulations and the exact location within Johor. These thresholds are strictly enforced by the Johor State Authority during the mandatory approval process for foreign purchases.

Do foreigners need specific visas or permits to buy property in Johor?

No, foreigners do not need a specific visa, residency status, or special permit to buy and own property in Johor.

You can purchase property with normal foreign status using just a valid passport. The property purchase itself does not require MM2H (Malaysia My Second Home) status, work permits, or any other Malaysian residency documentation.

However, MM2H participants may benefit from potentially lower minimum price thresholds in some cases, though the standard thresholds still apply for most property types. The MM2H program is separate from property ownership and is not a prerequisite for foreign property investment.

All foreign buyers must still obtain state consent approval from the Johor State Authority under Section 433B of the National Land Code, but this is a property transaction requirement, not a visa or residency requirement.

Can property purchases be completed remotely, or is physical presence required?

Physical presence in Malaysia is not required to complete a property purchase in Johor.

You can buy property remotely by appointing a qualified lawyer or licensed agent with Power of Attorney to execute contracts, submit documents, and complete the registration process on your behalf. All major transaction steps including signing the Sale & Purchase Agreement, applying for state consent, and handling the final transfer can be managed through your appointed representative.

However, property experts strongly recommend in-person visits for due diligence, property viewings, and direct negotiations with sellers or developers. Many developers recognize this and offer "fly before you buy" programs or inspection trips to help foreign buyers make informed decisions.

Remote purchases carry higher risks since you cannot personally inspect the property, verify its condition, or assess the surrounding area and infrastructure. For investment properties or purchases in unfamiliar developments, physical visits provide crucial insights that cannot be gained through online listings or virtual tours alone.

What is the complete step-by-step process for buying property as a foreigner?

The foreign property purchase process in Johor follows a structured sequence requiring specific documentation and approvals at each stage.

Step	Process	Required Documents
1. Eligibility Check	Verify property type and minimum price compliance	Property details, price confirmation
2. Property Selection	Choose property and negotiate terms with agent	Passport copy, initial booking receipt
3. SPA Signing	Execute Sale & Purchase Agreement within 14 days	Passport photocopy, 10% earnest deposit
4. State Consent Application	Lawyer files Section 433B NLC approval (2-6 months)	Certified SPA, passport copy, quit rent receipts
5. Payment Schedule	Pay remaining purchase price per contract terms	Bank remittance receipts, Power of Attorney if needed
6. Transfer & Registration	Complete legal transfer at Land Office after consent	Original SPA, payment proofs, stamped documents
7. Completion	Receive vacant possession and strata title	Final payment confirmation, handover documents

The state consent approval process typically takes 2-6 months and is mandatory for all foreign purchases. During this period, you cannot complete the transaction or take possession of the property. Proper legal representation is crucial for navigating the documentation requirements and ensuring smooth processing through each stage.

Is hiring a lawyer mandatory, and what are the advantages and disadvantages?

While not strictly legally mandatory, hiring a lawyer is highly recommended and considered essential for foreign property purchases in Johor.

Malaysian law requires qualified legal professionals for critical transaction steps including state consent applications, title searches, government submissions, and proper SPA documentation. Most banks and developers also require solicitor involvement for transaction security and compliance verification.

**Advantages of engaging a lawyer:**- Expert handling of mandatory state consent applications under Section 433B NLC- Comprehensive due diligence including title verification and encumbrance checks- Protection of buyer interests throughout the complex transaction process- Professional guidance on tax obligations, compliance requirements, and closing procedures- Reduced risk of documentation errors that could delay or invalidate the purchase**Disadvantages of engaging a lawyer:**- Additional cost typically ranging from 1-1.25% of the total purchase price- Quality varies significantly between firms, requiring careful selection of experienced practitioners- Potential delays if the chosen lawyer lacks specific expertise in foreign buyer transactions

The risks of not engaging a lawyer include missed due diligence issues, flawed contracts, failed state consent applications, and delayed or rejected property registration. Given the complexity of foreign buyer requirements in Malaysia, legal representation is essentially a necessity rather than an option.

What are all the taxes, fees, and ongoing costs for foreign property owners?

Foreign property buyers in Johor face several upfront costs and ongoing annual expenses that significantly impact the total investment.

Upfront transaction costs include stamp duty ranging from 1-4% on a progressive scale, legal fees of 1-1.25% of purchase price, and a state consent levy of 2% of purchase price or RM20,000 (whichever is higher) - this levy is unique to foreign buyers in Johor. Real estate agent commissions typically add another 3% of the purchase price.

When selling the property, foreigners pay Real Property Gains Tax (RPGT) at 10% of capital gains, regardless of holding period. This is higher than the rates applied to Malaysian citizens and permanent residents.

Annual ongoing costs include assessment tax based on local council valuations, quit rent fees that vary by land type and location, and maintenance fees for strata properties typically ranging from RM2,000-10,000 per year depending on the development's facilities and size.

As of September 2025, total upfront costs often reach 8-12% of purchase price when combining all fees, taxes, and professional services. These costs should be factored into your budget planning and return on investment calculations.

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

Are mortgages available to foreigners, and what are the typical conditions?

Yes, Malaysian banks do offer mortgages to foreign property buyers, but with more restrictive terms compared to local borrowers.

Foreign buyers typically need to provide a minimum down payment of 20-30% of the property value. Interest rates for foreign borrowers range from 4.0-5.5% per annum as of September 2025, based on variable base rates plus bank-specific margins.

Maximum loan tenure is usually 30 years or until the borrower reaches age 65, whichever comes first. Banks require comprehensive documentation including proof of income, passport verification, detailed property information, and often additional bank statements from the buyer's home country.

Approval rates are generally higher for buyers from Singapore, China, and other major economies, while MM2H participants may receive slightly more favorable terms. Many developers maintain relationships with specific banks and can facilitate the loan application process for new development purchases.

**Tips for mortgage approval:**- Work with banks experienced in foreign lending- Provide comprehensive income documentation from home country- Consider using developer-recommended banks for new purchases- Maintain strong credit history and stable employment- Be prepared for longer processing times compared to local applications

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Which areas of Johor offer the best opportunities for foreigners?

Several key areas in Johor stand out for foreign investment based on rental yields, capital appreciation potential, and lifestyle factors.

Medini Iskandar tops the list due to its special economic zone status with no minimum price thresholds for foreigners, international-oriented development, and strong rental demand from expatriates and students. The area benefits from ongoing infrastructure development and proximity to major attractions like Legoland and EduCity.

Johor Bahru City Center offers well-established infrastructure, strong rental yields from business travelers and cross-border workers, high tourism traffic, and excellent connectivity to Singapore. This area provides the most liquid resale market for foreign-owned properties.

Iskandar Puteri (formerly Nusajaya) represents a major growth corridor with proximity to international schools, Legoland, and business districts. The area attracts families and professionals, supporting both rental income and long-term capital appreciation.

Emerging neighborhoods like Mount Austin, Taman Molek, and Bukit Indah offer vibrant lifestyle amenities with strong rental demand from younger buyers and investors, while maintaining more affordable entry points compared to prime central locations.

Danga Bay and Tebrau provide waterfront and suburban investment opportunities with good rental potential, particularly for properties targeting the growing middle-class rental market.

What do current market indicators say about Johor's property investment potential?

As of September 2025, multiple market indicators suggest Johor maintains strong fundamentals for property investment despite regional economic challenges.

Johor Bahru ranks #26 in the Asia-Pacific Livability Index for 2025, praised for green cover, infrastructure development, and affordable cost of living with an #11 Price-to-Income Ratio ranking. This livability attracts both residents and investors seeking quality of life at reasonable costs.

Gross rental yields for condominiums in central Johor Bahru typically range from 4-6%, with higher yields possible in Medini and Iskandar areas due to strong expatriate and student rental demand. These yields compare favorably to other major Southeast Asian cities.

Tourism remains a major economic driver with Johor attracting millions of annual visitors to attractions like Legoland, Premium Outlets, and convention facilities. The first half of 2025 saw 14 million foreign visitors, supporting rental demand and investment returns in hospitality-adjacent properties.

The ongoing Iskandar Malaysia development continues driving infrastructure improvements, educational facilities, and healthcare expansion, which supports long-term capital appreciation prospects across the region.

Growth forecasts remain positive due to continued cross-border economic activity with Singapore, government infrastructure investments, and Johor's positioning as a more affordable alternative to Singapore for both living and business operations.

What are current property prices across different areas of Johor?

Property prices in Johor vary significantly based on location, property type, and development quality as of September 2025.

Area	High-rise (RM per sq.ft.)	Landed Houses (RM)
Johor Bahru City Center	RM700-1,500	RM1.2-3.5 million
Medini Iskandar	RM600-1,200	RM1.2+ million
Mount Austin/Tebrau/Bukit Indah	RM450-850	RM1.1-2.5 million
Other Iskandar Suburbs	RM400-900	RM1.1-2.3 million
Taman Molek/Permas Jaya	RM450-900	RM1.2-2.8 million
Danga Bay Waterfront	RM550-1,100	RM1.5-3.2 million

These prices reflect new development projects and vary significantly based on factors like tenure type (freehold vs leasehold), developer reputation, project facilities, and exact micro-location within each area. Established developments with proven rental track records typically command premium pricing.

Secondary market prices may offer better value, but foreign buyers should carefully verify that resale properties meet current minimum price thresholds and have proper documentation for foreign ownership transfer.

What are the most common mistakes foreign buyers make and how can they be avoided?

Foreign buyers in Johor frequently make costly errors that can be prevented with proper preparation and professional guidance.

**Most common mistakes include:**1. **Overlooking property eligibility restrictions** - Not verifying that specific properties meet foreign buyer requirements for type, location, and minimum price thresholds2. **Assuming all landed properties are available** - Many landed houses are in areas not designated as international zones, making them ineligible for foreign purchase3. **Skipping proper due diligence** - Failing to check clean title, existing encumbrances, or hidden development issues through qualified legal professionals4. **Relying solely on developer sales teams** - Not seeking independent legal and market advice before signing binding agreements5. **Underestimating approval timeframes** - Not accounting for the 2-6 month state consent approval process in purchase planning and financing arrangements

Additional critical errors include underestimating total ownership costs by not budgeting for annual taxes, maintenance fees, and selling costs like the 10% RPGT, as well as overpaying due to lack of comparable transaction data and market research.

The best prevention strategy involves engaging reputable, Johor-based agents and legal firms with extensive experience in foreign buyer transactions. These professionals should verify every required consent and document at each transaction stage, provide independent market valuations, and ensure compliance with all state and federal requirements.

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. ARSA Foreign Ownership Guidelines
2. Wise Malaysia Property Guide
3. Emerhub Malaysia Property Investment
4. BambooRoutes Johor Property Guide
5. FAR Academy Property Price Guide
6. Terra Group Land Use Policies
7. HomeSeek Malaysia Complete Guide
8. Crown Continental UK Guide
9. Titijaya Investment Guide
10. HousingWatch Malaysia Guide