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Foreigners can purchase property in Malaysia with full ownership rights, but they must meet specific minimum price requirements and obtain state approval before buying.
As of September 2025, foreign buyers need to invest at least RM1 million in most states, though some areas like Penang and certain Johor developments have different thresholds. The Malaysian property market remains accessible to international investors who follow the established regulations and approval processes.
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.
Foreign investors can own 100% of eligible properties in Malaysia, with minimum purchase prices typically starting at RM1 million depending on the state.
State approval is mandatory for all foreign property purchases, and the process usually takes 2-6 months to complete.
| Aspect | Requirement/Restriction | Details |
|---|---|---|
| Minimum Price | RM1 million (varies by state) | Penang: RM750,000-1.8M, Selangor: RM1.5-2M, Johor: RM1-2M |
| Property Types Allowed | High-rise residential, qualified landed properties | No Malay Reserved land, Bumiputera lots, or low-cost housing |
| Ownership Type | Both freehold and leasehold | 100% foreign ownership permitted |
| Approval Required | State authority approval mandatory | Processing time: 2-6 months typically |
| Local Partner | Not required | Foreigners can buy independently |
| Financing Options | Malaysian and international banks | MM2H program can facilitate financing |
| Rental Rights | Allowed for purchased properties | No additional restrictions beyond local laws |
What is the general rule for foreign ownership of property in Malaysia?
Foreigners can own 100% of eligible properties in Malaysia without needing a local partner or nominee arrangement.
The Malaysian government allows full foreign ownership of residential and commercial properties, but all purchases require approval from the relevant state authority before completion. Each state has its own property committee that reviews and approves foreign property applications.
Foreign buyers must meet minimum price thresholds that vary by state and property type. These thresholds are designed to ensure foreign investment focuses on higher-value properties rather than affordable housing segments reserved for Malaysian citizens.
The approval process is mandatory regardless of the property value or location, and foreign buyers cannot complete property purchases without obtaining this state-level consent first.
What is the minimum price foreign buyers must pay to purchase property in Malaysia?
The minimum property price for foreign buyers is generally RM1 million, but specific thresholds vary significantly by state and property type.
As of September 2025, Kuala Lumpur maintains the standard RM1 million minimum for all property types. Selangor requires RM2 million for landed properties and RM1.5 million for high-rise developments. Penang sets different thresholds for the island (RM1.8 million) versus the mainland (RM750,000).
Johor offers more flexibility with minimums ranging from RM1-2 million depending on the area, and special economic zones like Medini allow foreign purchases starting at RM600,000 for high-rise properties. Some new developments in Johor also receive exemptions that permit lower minimum prices.
These price thresholds are subject to change as state governments regularly review their foreign investment policies. It's something we develop in our Malaysia property pack.
Are there specific areas in Malaysia where foreigners can or cannot buy property?
Foreigners face significant restrictions on where they can purchase property, with several categories of land completely off-limits.
Malay Reserved land, which covers substantial portions of many states, cannot be purchased by non-Malays including foreign buyers. Bumiputera lots, designated for ethnic Malay and indigenous buyers, are also restricted. Agricultural land purchases by foreigners are generally prohibited unless specifically permitted by state authorities.
Low-cost and medium-cost housing developments are reserved for Malaysian citizens and permanent residents. In Selangor, foreigners can only buy landed properties with strata titles, typically found in gated communities rather than traditional standalone houses.
Some states and municipalities impose additional restrictions on foreigners buying auction properties or specific developments. Urban areas like Kuala Lumpur and Penang generally offer more options for foreign buyers compared to rural states with larger agricultural land reserves.
Can foreigners buy both freehold and leasehold property in Malaysia?
Yes, foreigners can purchase both freehold and leasehold properties in Malaysia, subject to state approval and minimum price requirements.
Freehold properties offer permanent ownership rights with no time limitations, making them particularly attractive to foreign investors seeking long-term security. These properties can be passed down through inheritance and sold without lease expiry concerns.
Leasehold properties typically come with 99-year lease terms, though some may have shorter periods. Foreign buyers should carefully review lease terms, renewal conditions, and any restrictions on property use or transfer before purchasing leasehold properties.
Both ownership types require the same state approval process and must meet minimum price thresholds. The choice between freehold and leasehold often depends on location, as some prime areas may only offer leasehold properties due to land scarcity.
What types of properties are foreign buyers allowed to purchase in Malaysia?
Foreign buyers can purchase high-rise residential properties like condominiums and apartments, along with qualified landed properties and commercial real estate.
| Property Type | Foreign Purchase Allowed | Key Restrictions |
|---|---|---|
| High-rise residential (condos/apartments) | Yes | Must meet state minimum price requirements |
| Landed houses (strata title) | Yes (limited states) | Selangor restricts to gated communities only |
| Commercial properties | Yes | Subject to state approval and price thresholds |
| Low-cost housing | No | Reserved for Malaysian citizens only |
| Malay Reserved land | No | Restricted to Malay buyers only |
| Agricultural land | Generally No | Requires special state permission |
| Bumiputera lots | No | Reserved for indigenous and Malay buyers |
Are there any restrictions on the type of property for foreigners in terms of land use?
Foreigners face strict land use restrictions, particularly regarding agricultural land and properties designated for specific ethnic groups.
Agricultural land purchases by foreigners are generally prohibited across most states unless special permission is granted by state authorities. This restriction aims to preserve food security and prevent speculation in farming areas. Commercial agricultural ventures by foreigners typically require separate approvals and may need to operate through Malaysian partnerships.
Residential land use is permitted for foreign buyers, but only for properties that meet minimum price thresholds and are not designated as Malay Reserved or Bumiputera lots. Mixed-use developments combining residential and commercial elements are generally acceptable for foreign purchase.
Industrial land purchases by foreigners may require additional approvals and are often tied to specific investment commitments or manufacturing operations. Some states offer special incentives for foreign industrial investment but maintain strict conditions on land use and development timelines.
Do foreigners need to apply for approval from the Malaysian government to buy property?
Yes, all foreign property purchases in Malaysia require mandatory approval from the relevant state authority before completion.
The approval process involves submitting applications to the state's Foreign Investment Committee or Economic Planning Unit, depending on the state structure. Required documents typically include passport copies, proof of income, property purchase agreement, and bank statements demonstrating financial capability.
State authorities evaluate applications based on the buyer's financial standing, the property's compliance with foreign ownership rules, and broader economic considerations. Some states prioritize applications for higher-value properties or developments that contribute to local economic growth.
Federal government approval is not required for most residential property purchases, as states maintain primary jurisdiction over land matters. However, certain strategic locations or high-value commercial properties may require additional federal-level clearances. It's something we develop in our Malaysia property pack.
How long does it typically take for a foreigner to get approval to purchase property in Malaysia?
Foreign property purchase approval typically takes 2-6 months, though processing times vary significantly by state and application complexity.
Kuala Lumpur and Selangor generally process applications within 2-3 months due to more streamlined procedures and higher application volumes. Penang approvals often take 3-4 months, while states with fewer foreign applications may require 4-6 months or longer.
Factors affecting approval speed include complete documentation submission, property compliance with state requirements, and the buyer's financial credentials. Applications with missing documents or properties near restricted areas face longer processing times.
Engaging experienced local lawyers can significantly expedite the approval process, as they understand state-specific requirements and can ensure proper document preparation. Some states offer fast-track approvals for high-value purchases or developments in designated investment zones.
Delays beyond 6 months are not uncommon, particularly during peak application periods or when state committees have limited meeting schedules.
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What are the common costs and fees involved for foreigners when buying property in Malaysia?
Foreign property buyers face several mandatory costs including stamp duty, legal fees, valuation fees, and real property gains tax upon future sale.
Stamp duty rates vary by property value, typically ranging from 1-4% of the purchase price. Legal fees for property transactions generally cost 1-1.5% of the property value, though foreign buyers may pay slightly higher rates due to additional documentation requirements.
Property valuation fees range from RM300-2,000 depending on the property value and location. Foreign buyers also pay approval application fees to state authorities, typically RM500-2,000 per application.
Real Property Gains Tax (RPGT) applies when foreign owners sell properties, with rates varying by holding period. Properties sold within the first year incur 30% RPGT, decreasing to 10% for properties held over 5 years.
Additional costs may include property management fees for condominiums, insurance, and ongoing maintenance expenses that foreign owners should factor into their investment calculations.
Do foreigners need to have a local partner or a representative to buy property in Malaysia?
No, foreigners do not need a local partner, nominee, or representative to purchase property in Malaysia.
Malaysia allows 100% foreign ownership of eligible properties, eliminating the need for complex partnership structures or nominee arrangements common in some neighboring countries. Foreign buyers can purchase properties directly in their own names and maintain full legal ownership rights.
While local partners are not required, many foreign buyers choose to engage Malaysian lawyers and real estate agents to navigate the approval process and local market conditions. These professionals provide valuable assistance but do not need to be listed as property owners or partners.
Foreign buyers should be cautious of any suggestions to use nominee arrangements, as these can create legal complications and are unnecessary under Malaysian property law. Direct ownership provides clearer legal protection and simpler inheritance or sale processes.
Are there any restrictions or additional requirements for foreigners who want to rent out their property in Malaysia?
Foreign property owners can generally rent out their purchased properties without additional restrictions beyond standard local tenancy laws.
Properties purchased legally by foreigners can be rented to Malaysian citizens and other foreigners without special permits or approvals. Rental income is subject to Malaysian income tax, with non-resident owners paying higher tax rates than residents.
Some condominium developments may impose specific rental management requirements or restrict short-term rentals through building bylaws. Foreign owners should review building rules and management agreements before finalizing purchases if rental income is a primary investment goal.
Certain states may have local regulations affecting rental properties, particularly regarding tenant registration or safety requirements. Foreign owners must comply with these local rules but face no additional restrictions specifically due to their foreign status. It's something we develop in our Malaysia property pack.
Properties in restricted categories like Malay Reserved land cannot be purchased by foreigners, eliminating any rental opportunities in these areas.
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 can foreign buyers finance property purchases in Malaysia?
Foreign buyers can finance Malaysian property purchases through Malaysian banks, international banks, or specialized programs like MM2H (Malaysia My Second Home).
Malaysian banks offer property loans to foreigners, typically requiring higher down payments (30-40%) compared to local buyers. Foreign applicants must demonstrate stable income, good credit history, and often need to maintain Malaysian bank accounts for several months before loan approval.
International banks with Malaysian operations may provide financing options for their existing customers, potentially offering more favorable terms based on global banking relationships. Some foreign buyers choose to secure financing from their home country banks using Malaysian property as collateral.
The MM2H residency program facilitates property financing for participants who invest at least RM600,000 in Malaysian real estate. MM2H holders often receive preferential loan terms and streamlined approval processes from Malaysian financial institutions.
Cash purchases remain common among foreign buyers due to simpler processes and stronger negotiating positions, particularly in competitive markets like Kuala Lumpur and Penang where sellers prefer quick, certain transactions.
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 substantial opportunities for international investors willing to navigate state-specific regulations and minimum price requirements.
The combination of 100% foreign ownership rights, diverse financing options, and rental income potential makes Malaysia an attractive destination for both investment and residence purposes.
Sources
- PropEasy Asia - Guidelines for Foreigners Buying a House in Malaysia
- Housing Watch Malaysia - How to Buy a House in Malaysia as a Foreigner 2025 Guide
- Alestria Property - Can Foreigners Buy Property in Malaysia in 2025
- IQI Global - Buying Land in Malaysia for Foreigners
- EmerHub - Buying Property in Malaysia
- Berinda - Buying Property in Malaysia as a Foreigner
- FAR Academy - Minimum Property Price That a Foreigner Can Buy in 2025
- UNCTAD Investment Policy Monitor - Malaysia Relaxes Foreign Property Ownership
- Estate Agent Power - Can Foreigners Buy Property in Malaysia Laws Limits Opportunities
- MM2H Official - Buying Property