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
Malaysia offers a relatively open property market for foreign buyers, with state-specific minimum purchase thresholds ranging from RM500,000 to RM2,000,000.
Unlike many Asian countries, Malaysia doesn't require visa or residency status to own property, though foreign buyers must secure state authority approval for each purchase. The process typically takes 3-9 months from offer to completion, with foreigners eligible for mortgages up to 80% of property value under certain conditions.
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.
As of June 2025, foreigners can buy most property types in Malaysia above state-specific minimum thresholds, with no visa requirements but mandatory state approval needed.
The Malaysian property market expects 9-10% price growth in 2025, with Johor Bahru offering the highest rental yields at 5-7% and Kuala Lumpur remaining the top choice for capital appreciation.
| Aspect | Details for Foreigners | Key Considerations |
|---|---|---|
| Property Types Allowed | Residential (high-rise & landed), commercial, industrial | Cannot buy: Malay Reserved Land, low-cost units, agricultural land |
| Minimum Price | RM500,000 - RM2,000,000 (varies by state) | Selangor: RM2M (strata only), Penang Island: RM1.8M (landed) |
| Visa Required | No visa needed to buy | Property ownership doesn't grant residency |
| Mortgage Access | 60-80% LTV available | Interest rates: 3.95-4.2% p.a., up to 30 years |
| State Approval | Mandatory for all foreign purchases | Takes 2-6 months, handled by lawyer |
| RPGT Tax | 30% (sold within 5 years), 10% (after 5 years) | Applies to capital gains on resale |
| Process Duration | 3-9 months total | Can be done remotely with Power of Attorney |
What types of property can foreigners legally buy in Malaysia?
Foreigners can legally purchase residential properties (both high-rise condos and landed houses), commercial properties, and industrial properties in Malaysia.
However, you cannot buy properties on Malay Reserved Land, low and medium-cost residential units as defined by state authorities, properties allocated for Bumiputera interests, or agricultural land unless it's specifically gazetted for development and you have state consent. These restrictions ensure certain property types remain accessible to local Malaysians.
Each Malaysian state sets its own minimum purchase price for foreigners. In Kuala Lumpur, Kelantan, and Pahang, the threshold is RM1 million, while Selangor requires RM2 million for strata properties only. Johor has a split system with RM2 million for landed properties in international zones and RM1 million for high-rise units.
The key difference compared to locals is that Malaysians face no minimum price restrictions and can buy any property type except designated Bumiputera lots. Permanent residents are treated the same as foreigners for property purchase rules, meaning they face the same restrictions and minimum thresholds.
It's something we develop in our Malaysia property pack.
What are the minimum investment amounts and visa requirements for buying property?
You don't need any visa or residency status to buy property in Malaysia - property ownership is completely separate from immigration status.
The minimum investment varies significantly by state. Selangor has the highest threshold at RM2 million for strata properties, while states like Sarawak and Perlis allow purchases from RM500,000. Most states hover around the RM1 million mark, with some differentiating between landed and high-rise properties.
| State/Territory | Minimum for Landed Property | Minimum for High-Rise Property |
|---|---|---|
| Selangor | Not allowed | RM2,000,000 |
| Johor | RM2,000,000 (int'l zones) | RM1,000,000 |
| Penang Island | RM1,800,000 | RM800,000 |
| Penang Mainland | RM750,000 | RM400,000 |
| Kuala Lumpur | RM1,000,000 | RM1,000,000 |
| Sabah | RM1,000,000 | RM600,000 |
| Sarawak | RM500,000 | RM500,000 |
| Negeri Sembilan | RM1,000,000 | RM600,000 |
| Kedah | RM600,000 | RM600,000 |
| Other states | RM500,000 - RM1,000,000 | RM500,000 - RM1,000,000 |
While property ownership doesn't grant residency, the Malaysia My Second Home (MM2H) program offers a 10-15 year renewable visa for those meeting financial criteria. MM2H holders may access lower property price thresholds in some states and enjoy easier mortgage access with up to 80% financing.
The Premium Visa Program (PVIP) is another option requiring proof of offshore income and a fixed deposit, though it's not directly tied to property purchases.
Do I need to be physically present in Malaysia during the purchase process?
You don't need to be physically present in Malaysia at any stage of the property buying process.
Foreign buyers can complete the entire transaction remotely by appointing a Power of Attorney to act on their behalf. Your appointed lawyer can handle document signing, state consent applications, and property registration without you being in the country. This includes the initial offer, Sale and Purchase Agreement signing, loan applications if needed, and final property transfer.
Many foreign buyers choose to visit Malaysia initially to view properties and select their preferred unit, but even this isn't mandatory. Virtual property tours and detailed property reports from licensed agents can substitute for physical viewings.
The Power of Attorney document must be properly notarized in your home country and authenticated by the Malaysian embassy or consulate there. Once this is arranged, your Malaysian lawyer has full authority to complete the purchase on your behalf.
What's the complete step-by-step process and required documents?
The property purchase process in Malaysia follows a structured path that typically takes 3-9 months from start to finish.
- Property Selection: Research and view properties, either in person or virtually
- Make an Offer: Submit offer letter with 2-3% earnest deposit
- Hire a Lawyer: Essential for due diligence, title verification, and contract preparation
- Sign Sale & Purchase Agreement (SPA): Within 14-21 days after offer acceptance
- Apply for State Consent: Your lawyer submits application to state authorities (2-6 months for approval)
- Arrange Financing: Apply for mortgage if needed (processing takes 1-2 months)
- Pay Progressive Payments: According to SPA schedule
- Complete Purchase: Pay balance and stamp duty
- Register Transfer: Title deed transferred at Land Office
- Take Possession: Receive keys and complete handover
Required documents include your passport copy, proof of income (last 6 months bank statements and employment letter), tax returns from your home country, the Sale and Purchase Agreement, state consent approval letter, and loan approval letter if financing. All foreign documents must be translated to English or Malay and certified.
It's something we develop in our Malaysia property pack.
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Is hiring a local lawyer or agent mandatory, and how do I choose one?
While not legally mandatory, hiring a Malaysian lawyer is standard practice and strongly recommended for foreign buyers to ensure proper due diligence and smooth transaction completion.
Lawyers handle critical tasks including title searches, contract drafting, state consent applications, and property registration. They verify the property isn't encumbered, ensure it's eligible for foreign ownership, and protect your interests throughout the transaction. Legal fees typically range from 0.5-1% of the property price on a sliding scale.
Property agents aren't mandatory either, but they provide invaluable market access, negotiation expertise, and local knowledge. Ensure any agent you work with is registered with BOVAEP (Board of Valuers, Appraisers, Estate Agents, and Property Managers) - you can verify their registration online.
To choose trustworthy professionals, check BOVAEP registration for agents, seek client testimonials and online reviews, ask about their experience with foreign buyers, request references from other international clients, and ensure they communicate clearly in English. Look for lawyers who specialize in property transactions and have handled foreign purchases in your target area.
Red flags include professionals who pressure you to make quick decisions, request unusually high upfront fees, cannot provide proper credentials, or suggest ways to circumvent foreign ownership rules.
Where do most foreigners buy property in Malaysia?
Foreign buyers concentrate in five main areas that offer the best combination of lifestyle, infrastructure, and investment potential.
Kuala Lumpur remains the top choice, particularly KLCC, Mont Kiara, Bangsar, and Damansara Heights. These neighborhoods offer cosmopolitan living, international schools, established expat communities, and excellent healthcare facilities. Mont Kiara specifically caters to expatriates with its high concentration of international residents and amenities.
Penang, especially George Town, Tanjung Tokong, and Batu Ferringhi, attracts buyers seeking heritage charm combined with beach lifestyle. The state offers a vibrant cultural scene, UNESCO World Heritage sites, and a large, welcoming expat community.
Johor Bahru, particularly Iskandar Malaysia and Forest City, draws investors and families due to proximity to Singapore. Many buyers are Singaporeans or expats working in Singapore but seeking more affordable Malaysian property.
Selangor suburbs like Petaling Jaya, Shah Alam, and Setia Alam appeal to families seeking spacious homes, good schools, and suburban amenities while maintaining easy access to Kuala Lumpur.
Kota Kinabalu in Sabah attracts lifestyle buyers seeking tropical island living, pristine beaches, and access to world-class diving sites.
Which areas offer the best investment potential in Malaysia?
As we reach mid-2025, different Malaysian locations excel in various investment metrics.
For capital appreciation, Kuala Lumpur's KLCC and Bangsar neighborhoods continue leading with steady 6-8% annual growth driven by limited supply and sustained demand. The upcoming MRT3 line completion in 2028 will further boost values in Mont Kiara and Damansara areas.
Johor Bahru offers Malaysia's highest rental yields at 5.5-7%, particularly in Iskandar Puteri and areas near the Singapore border. The RTS Link to Singapore, scheduled for 2027 completion, promises to enhance rental demand significantly.
| Location | Capital Appreciation Potential | Current Rental Yield | Key Investment Driver |
|---|---|---|---|
| KLCC/Bukit Bintang | High (6-8% annually) | 4-5% | CBD location, limited supply |
| Iskandar Malaysia | Very High (8-10%) | 5.5-7% | Singapore proximity, infrastructure |
| Penang Island | Moderate (4-5%) | 3-4% | Tech sector growth, lifestyle |
| Setia Alam/Kota Kemuning | Moderate (5-6%) | 5-6% | Family demand, new townships |
| Cyberjaya | High (6-7%) | 5-5.5% | Tech hub development |
| Desa ParkCity | Moderate (4-5%) | 4-5% | Integrated development, lifestyle |
| Kota Kinabalu | Low-Moderate (3-4%) | 4-5% | Tourism recovery |
For quality of life, Penang and Kuala Lumpur's established neighborhoods like Bangsar and Damansara Heights offer the best combination of amenities, international communities, and urban conveniences.
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 much does real estate cost across Malaysia, and what are the price trends?
Property prices in Malaysia vary significantly by location, with Kuala Lumpur commanding the highest prices at RM8,500-15,000 per square meter in prime areas as of June 2025.
Mont Kiara properties average RM8,000-10,000 per square meter, while Bangsar commands RM9,000-12,000 per square meter due to its established status. Penang's George Town ranges from RM6,000-10,000 per square meter, offering better value than KL while maintaining strong appreciation potential.
Johor Bahru presents the most affordable entry point among major cities at RM4,000-8,000 per square meter, though prices in Iskandar Malaysia's premium developments can reach RM10,000 per square meter.
The Malaysian property market expects 9-10% price growth in 2025, particularly in Kuala Lumpur and Selangor, driven by infrastructure improvements, economic recovery, and increased foreign investment following the relaxation of some ownership rules.
Secondary cities like Ipoh (RM2,500-4,000/sqm) and Melaka (RM3,000-5,000/sqm) offer value opportunities, though with lower liquidity and rental demand compared to primary markets.
Can foreigners get mortgages in Malaysia?
Yes, foreigners can obtain mortgages from Malaysian banks, though terms are more restrictive than for locals.
Foreign buyers without MM2H status typically qualify for 60-70% loan-to-value ratios, while MM2H visa holders can access up to 80% financing. Interest rates as of June 2025 range from 3.95-4.2% per annum, slightly higher than rates offered to Malaysian citizens.
Banks generally offer loan tenures up to 30 years or until age 65-70, whichever comes first. Some banks like CIMB and Maybank have dedicated foreign buyer units that understand international income documentation.
Required documents include passport, employment letter, latest 6 months salary slips, bank statements, tax returns from home country, and property purchase documents. Income can be derived from overseas sources, but must be properly documented and verified.
Major banks offering foreign buyer mortgages include Maybank, CIMB, Public Bank, Hong Leong Bank, and UOB. Each has different criteria, so shopping around is essential. Processing typically takes 4-8 weeks, and approval rates are lower than for locals, making pre-approval advisable before property hunting.
What taxes and fees should I expect when buying and owning property?
Foreign property buyers in Malaysia face several taxes and fees that significantly impact the total investment cost.
Stamp duty on property purchase follows a tiered structure: 1% on the first RM100,000, 2% on the next RM400,000, 3% on the next RM1.5 million, and 4% on amounts exceeding RM2 million. Legal fees follow a similar sliding scale from 1% on the first RM150,000 down to 0.5% for amounts above RM7.5 million.
State consent fees for foreign purchases vary dramatically from RM1,000 to over RM20,000 depending on the state and property value. Agent commission up to 3% is typically paid by the seller, though in Johor and Penang, buyers often share this cost.
Annual holding costs include quit rent (land tax) averaging RM1,000-3,000 yearly, and assessment rates (council tax) ranging from RM1,200-6,000 annually depending on property size and location. Condominium owners pay additional maintenance fees of RM0.30-0.80 per square foot monthly.
When selling, foreigners pay Real Property Gains Tax (RPGT) of 30% on profits if sold within 5 years, reducing to 10% for sales after 5 years. This is higher than the rates for Malaysians, who pay 0% after 5 years.
It's something we develop in our Malaysia property pack.
What mistakes do foreigners commonly make when buying Malaysian property?
The most costly mistake is failing to account for all expenses beyond the purchase price - many buyers budget only for the property cost without considering the additional 5-7% in taxes, fees, and charges.
- Insufficient due diligence: Not verifying property titles, checking for encumbrances, or confirming developer credentials leads to legal issues. Always use a qualified lawyer to conduct thorough checks.
- Buying restricted properties: Some foreigners attempt to purchase properties on Malay Reserved Land or below state minimums, wasting time and deposits. Verify eligibility before making any commitment.
- Not comparing mortgage options: Accepting the first bank's offer without shopping around can cost thousands in extra interest. Compare at least 3-4 banks' terms.
- Skipping professional help: Trying to save on lawyer or agent fees often results in costly mistakes. These professionals protect your interests and ensure compliance.
- Ignoring state-specific rules: Each state has different requirements and restrictions. What's allowed in Penang may not be permitted in Selangor.
- Poor timing of currency exchange: Not planning currency conversion can result in significant losses. Monitor exchange rates and consider forward contracts for large transfers.
- Overlooking rental restrictions: Some developments prohibit short-term rentals. Verify rental policies if you plan to generate income.
What tax implications should I consider in Malaysia and my home country?
Foreign property owners face tax obligations in both Malaysia and their home countries, making proper planning essential.
In Malaysia, rental income is taxed at a flat rate of 30% for non-residents after allowable deductions. You can deduct mortgage interest, maintenance fees, property management costs, and assessment rates. Capital gains are subject to RPGT at 30% within 5 years or 10% thereafter.
Most countries tax their citizens on worldwide income, meaning you must declare Malaysian rental income and capital gains at home. However, many nations have Double Taxation Agreements (DTAs) with Malaysia, allowing tax paid in Malaysia to offset home country obligations.
Key considerations include checking if your country has a DTA with Malaysia, understanding how foreign tax credits work in your home jurisdiction, keeping detailed records of all Malaysian taxes paid, and considering the timing of property sales to optimize tax treatment.
Some countries may also impose wealth taxes on overseas properties or require annual reporting of foreign assets above certain thresholds. The US FATCA and CRS reporting requirements mean Malaysian banks report foreign account holders to their home tax authorities.
Professional tax advice covering both jurisdictions is essential before purchasing, as poor structuring can result in unnecessary double taxation.
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 investment in Malaysia offers relatively straightforward access compared to other Asian markets, with clear regulations and established processes for international buyers.
Success requires understanding state-specific rules, budgeting for all associated costs, and working with qualified professionals throughout the transaction. As the Malaysian property market continues its recovery trajectory in 2025, opportunities exist across various cities and property types for well-informed foreign investors.
Sources
- iProperty Malaysia - Complete Guide for Foreigners
- PropertyGuru - Foreign Buyer Guide
- Global Property Guide - Malaysia Buying Guide
- Smart Invest Malaysia - Top Cities Guide 2025
- Azmi & Associates - Legal Guide for Foreign Buyers
- Official MM2H - Property Price Requirements
- Crowe Malaysia - Tax Treatment Guide
- Vijaya Law - Legal Pitfalls and Solutions
- BambooRoutes - Malaysia Real Estate Tips for Foreigners
- The Edge Malaysia - Property Market Outlook 2025