Foreigners Buying Process
Foreigner Buying process to buy a house in Malaysia involves several steps and certain requirements*.
Foreign Ownership Restrictions
- Foreigners can buy property in Malaysia with the minimum purchase price for residential property
- It is varies by states generally ranges from RM 1 million to RM 2 million depending on the State.
Choose Property
- It’s advisable to hire a real estate agent who can help you navigate the local market ensuring the property is eligible for foreign ownership .
Letter of offer
- Once you’ve found the desired property, you’ll need to sign a Letter Of Offer with the seller or developer, this is a preliminary agreement that outlines the price, terms and conditions of the sale.
Engage a Lawyer
- You’ll need to hire a lawyer to assist with the legal process. The lawyer will help with the due diligence, prepare the Sale and Purchase Agreement (SPA) and guide you through the various legal requirements.
- A lawyer will also checks and ensure if the property is free from any encumbrances or legal issues.
Sale and Purchase Agreement ( SPA )
- After the letter of offer both parties ( you and the seller) will sign the Sale and Purchase Agreement prepares by the lawyer.
- You will need to pay the deposit usually 10% of the property price with 3% as the initial deposit and 7% upon signing the SPA
- The SPA will detail the purchase price, payment schedule, completion period and the conditions of sale.
Paying the Stamp Duty (MOT)
MOT Stamp duty is a tax to the purchase transaction and must be paid within 30 days from signing the SPA, It’s calculate as follow;
- 1% on the first RM100,000 of the property price
- 2% on the nest RM400,000
- 3% on the balance above RM500,000
Financing the purchase
- To Securing a mortgage in Malaysia could be arrangeable, Local banks may offer up to 70% or 80% margin of finance.
- Borrower typically need to show proof of income, a clean credit history and a valid visa or PR status.
Filling with the and office
- The lawyer will submit the documents for ownership’s registration at the land office when full payment ha been make.
- Title Deed (or strata title for condo) . This is the final document that proves your ownership of the property.
Other Costs
- Legal fees: The lawyer’s fees for handling the transaction typically range 1% to 1.5% of the propertyvalue.
- If you sell the property within 5 years ( Individual and Company are vary ) you will be subject to RPGT which is a tax if capital gain from the sale.
Key Considerations
- Foreign Ownership Restrictions: Each state may have its own foreign ownership rules and minimum price requirements for properties
- Many foreigners purchase property in Malaysia as part of Malaysia My Second Home (MM2H) program which offers long-term residency options.
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