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Everything you need to know before buying real estate is included in our Malaysia Property Pack
Yes, foreigners can legally buy property in Malaysia, but strict state-specific restrictions apply.
Each Malaysian state sets its own minimum purchase prices and property type restrictions for foreign buyers. As of September 2025, these minimums range from RM500,000 in Sarawak to over RM2 million in certain areas of Penang and Johor. All foreign property purchases require written state consent, and buyers face additional taxes including a 2% foreigner levy.
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Foreigners can purchase residential, commercial, and industrial properties in Malaysia, but must meet state-specific minimum prices and obtain government approval.
The process involves additional costs, mortgage restrictions, and compliance with varying state regulations that can significantly impact investment returns.
| Aspect | Foreigners | Malaysian Citizens |
|---|---|---|
| Property Types Allowed | High-rise, landed, commercial (with restrictions) | All types (except Bumiputera lots for non-Bumiputera) |
| Minimum Purchase Price | RM500,000 - RM2,000,000+ (varies by state) | No minimum (except specific restricted lots) |
| State Approval Required | Yes (2-6 months processing) | No |
| Additional Taxes | 2% foreigner levy + standard fees | Standard fees only |
| Mortgage Loan-to-Value | Up to 70% | Up to 90% |
| Ownership Duration | Indefinite (freehold permitted) | Indefinite |
| Resale Restrictions | None (RPGT applies) | None (RPGT applies) |
Can foreigners legally buy property in Malaysia?
Yes, foreigners can legally purchase property in Malaysia under specific conditions set by federal and state laws.
The Malaysian government permits foreign ownership of residential, commercial, and industrial properties, but each state government sets its own restrictions and minimum purchase prices. As of September 2025, these regulations vary significantly across Malaysia's 13 states and 3 federal territories.
All foreign property purchases require written consent from the relevant State Authority, which serves as a mandatory legal prerequisite. This approval process typically takes 2-6 months and involves administrative review rather than discretionary approval, provided all requirements are met.
The federal government maintains overall policy direction, but individual states have significant autonomy in setting foreign investment parameters for real estate within their boundaries.
What types of property can foreigners purchase in Malaysia?
Foreigners can buy high-rise residential units, landed houses, commercial properties, and industrial properties with certain restrictions.
Permitted property types include condominiums, apartments, serviced apartments, bungalows, semi-detached houses, terrace houses, shop houses, office buildings, retail spaces, warehouses, and factory buildings. These properties can be held under freehold or leasehold titles.
However, foreigners cannot purchase properties on Malay Reserved Land, Bumiputera lots, low-cost housing (typically under RM150,000), medium-cost housing, and certain categories of agricultural land without special state consent. These restrictions protect affordable housing stock for Malaysian citizens and preserve culturally significant land categories.
It's something we develop in our Malaysia property pack.
Some states also restrict foreign ownership of landed properties in certain designated areas or impose higher minimum prices for landed versus high-rise properties.
Are there any restrictions on the location of the property?
Yes, significant location-based restrictions exist, with each Malaysian state setting its own rules for foreign property purchases.
States designate specific zones where foreign ownership is permitted or restricted. For example, Johor has created "international zones" where different minimum prices apply for foreign buyers compared to other areas within the state.
Penang Island imposes different minimum purchase prices than mainland Penang, with RM2 million required for landed properties on the island versus lower amounts on the mainland. Similarly, certain premium areas in Kuala Lumpur and Selangor may have elevated minimum price requirements.
Some states restrict foreign ownership near borders, in rural areas, or in locations deemed strategically sensitive. Agricultural zones, traditional villages, and environmentally protected areas often have additional limitations or complete restrictions on foreign ownership.
What is the minimum price for a property that foreigners can buy in Malaysia?
Minimum purchase prices for foreigners range from RM500,000 to over RM2 million depending on the state and property type.
| State/Territory | Minimum Price (RM) | Property Type |
|---|---|---|
| Kuala Lumpur | 1,000,000 | All property types |
| Penang Island | 2,000,000 (landed) / 800,000 (strata) | Differentiated by type |
| Johor (International Zones) | 2,000,000 | Landed properties |
| Selangor | 1,000,000 | All property types |
| Sarawak | 500,000 | All property types |
| Sabah | 1,000,000 | All property types |
| Melaka | 500,000 | All property types |
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Do foreigners need to get approval from the government to purchase property?
Yes, all foreign property purchases in Malaysia require written consent from the relevant State Authority before the transaction can proceed.
This state consent is a mandatory legal requirement under the National Land Code and various state enactments. The approval process involves submitting detailed documentation including the sales and purchase agreement, buyer's identification, financial capability proof, and property details.
The processing time typically ranges from 2-6 months, depending on the state and complexity of the application. Most applications are approved administratively if they meet the established criteria, rather than being subject to discretionary decision-making.
Failure to obtain state consent before completing a property purchase can void the transaction and result in legal complications. Buyers should factor this approval timeline into their purchase planning and ensure all documentation is complete before submission.
Are there any additional taxes or fees for foreigners buying property in Malaysia?
Yes, foreigners face several additional costs beyond the standard property transaction fees paid by Malaysian citizens.
The primary additional cost is the foreigner state levy, which amounts to 2% of the purchase price or RM20,000, whichever is higher. This levy is paid to the state government and is separate from other transaction costs.
Standard transaction costs that apply to all buyers include stamp duty at 4% of the purchase price, legal fees ranging from 1% to 1.25% of the property value (tiered by value), and valuation fees typically around RM1,000-3,000.
Upon resale, foreigners are subject to Real Property Gains Tax (RPGT) at 30% if the property is sold within 5 years of purchase, or 5% if sold after 6 years. These rates are the same for Malaysian citizens but represent a significant consideration for foreign investors planning shorter holding periods.
It's something we develop in our Malaysia property pack.
Can foreigners obtain a mortgage for a property purchase in Malaysia?
Yes, foreigners can obtain mortgages from Malaysian banks, but with more restrictive terms compared to Malaysian citizens.
The primary restriction is the loan-to-value (LTV) ratio, which is capped at approximately 70% for foreign buyers compared to up to 90% for Malaysian citizens. This means foreigners must provide larger down payments, typically 30% or more of the property value.
Major Malaysian banks including HSBC, UOB, CIMB, and Public Bank offer home loans to foreigners. Documentation requirements include valid passport, visa status, income proof, employment details, and often participation in the MM2H program or possession of a valid work permit.
Interest rates for foreign borrowers are generally comparable to those for locals, but banks may require additional guarantees or impose stricter debt-to-income ratios. The mortgage approval process typically takes 4-8 weeks and requires property valuation by bank-approved valuers.
How does the process of buying property differ for foreigners compared to Malaysians?
The foreign property purchase process involves additional steps, longer timelines, and higher costs compared to purchases by Malaysian citizens.
Key differences include the mandatory state consent requirement (2-6 months processing time), higher minimum purchase prices set by individual states, payment of the additional 2% foreigner levy, and more restrictive mortgage terms with lower LTV ratios.
Foreigners also face property type restrictions, cannot purchase Malay Reserved Land or Bumiputera lots, and must provide more extensive documentation including proof of funds source and compliance with foreign exchange regulations.
The legal process requires engagement of qualified Malaysian lawyers familiar with foreign ownership regulations, and buyers must ensure compliance with both federal and state-specific requirements that can vary significantly across different locations in Malaysia.
Are there any specific visa or residency requirements for property buyers?
No mandatory visa or residency requirements exist for foreign property buyers, but certain programs can facilitate the purchase process.
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What is the duration of property ownership for foreigners in Malaysia?
Foreigners can own property indefinitely in Malaysia, with both freehold and leasehold options available.
Freehold properties provide permanent ownership rights that can be passed to heirs or sold without time restrictions. Leasehold properties typically come with 99-year terms, though some may have shorter periods depending on the original land grant.
Strata titles for condominiums and apartments also provide indefinite ownership rights for the individual unit, while the underlying land may be held under various tenure arrangements managed by the building's management corporation.
Property ownership rights include the ability to occupy, rent out, renovate (subject to building regulations), and transfer ownership through sale or inheritance, providing foreign investors with substantial control over their assets.
Can a foreigner sell their property in Malaysia anytime?
Yes, foreigners can sell their Malaysian property at any time without restrictions, subject to applicable capital gains tax.
The primary consideration is the Real Property Gains Tax (RPGT), which applies at 30% of the gain if the property is sold within 5 years of purchase, or 5% if sold after 6 years. This tax structure encourages longer-term holding but does not prevent earlier disposal.
No additional approval is required from state authorities for the sale, and foreign sellers can repatriate proceeds through normal banking channels subject to compliance with foreign exchange regulations.
The sale process follows standard Malaysian property transaction procedures, including engagement of qualified lawyers, property valuation, and completion of transfer documents with the relevant land office.
What are the legal and financial risks for foreigners when buying property in Malaysia?
Foreign property buyers face several categories of risks related to regulatory changes, market conditions, and compliance requirements.
Legal risks include potential changes in state-level foreign ownership policies, fluctuating minimum price requirements, and the possibility of stricter restrictions being imposed on future transactions. The mandatory state consent process, while typically administrative, could face delays or complications.
Financial risks encompass currency fluctuation affecting repatriation of funds, property market volatility, higher transaction costs compared to local buyers, and the significant RPGT burden for shorter holding periods. The limited mortgage LTV ratios also increase the required capital commitment.
Operational risks include difficulties in property management for non-resident owners, potential complications with rental management, and challenges in navigating ongoing compliance requirements for property taxes and maintenance obligations.
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.
Foreign property ownership in Malaysia offers significant opportunities but requires careful navigation of state-specific regulations and additional costs.
Success depends on thorough due diligence, professional legal guidance, and understanding the long-term implications of minimum price requirements and tax obligations.
Sources
- Wise - Foreigner Buy House in Malaysia
- Emerhub - Buying Property in Malaysia
- BambooRoutes - Malaysia Real Estate Foreigner
- BambooRoutes - Foreigner Buy Property Malaysia Without MM2H
- Offshore in Asia - What to Know When Buying Property in Malaysia
- Housing Watch - How to Buy a House in Malaysia as a Foreigner
- Estate Agent Power - Can Foreigners Buy Property in Malaysia
- OneAsia Legal - Foreign Investment in Malaysia
- Moore BZI - What Kind of Properties Can Foreigners Own in Malaysia
- Mah Weng Kwai - Property Transactions Requiring State Consent
-Is Malaysia Property a Good Investment?
-Buying Property in Penang vs Kuala Lumpur
-Why Malaysian Property is Cheaper than Singapore
-Why So Many Condos Are Empty in Malaysia
-Forest City: Malaysia's Ghost Town Development
-Buying Property Near Malaysia-Singapore Border
-Getting Residency by Buying Property in Malaysia
-Are Penang Properties Overpriced?