Malaysian Buying Process

The process of buying a house in Malaysia citizen is relatively straightforward but still involves several important steps and legal requirements.

Eligibility to Buy Property

• As Malaysian citizen you are eligible to buy any type of property provided you meet the requirements set by the state government (bumi and Non-bumi lot)
• All properties includes landed property and high-rise condominium.

Choose the Property

• Start researching areas, property types and budgets , Popular state includes Selangor, Klang Valley Kuala Lumpur, Penang, Johor and Ipoh
• Yuou can either buy a property from a developer for new development or from an existing owner ( Sub-sale unit) on second-hand property.
• Each option has its advantage such as newer properties often requiring less maintenance while resale properties may offer better value in certain areas.

Obtain Mortgage (if needed)

• If you’re not purchasing the property outright, you will likely need a mortgage loan.
• Malaysian Banks offers financing covering up to 90% of the property value depending on the banks assessment of your financial status
• It’s a good idea to get a loan pre-approval to understand how much you can borrow (budget) before you start house hunting.
• typically you’ll need to provide a minimum 10% down payment for the property.
• The loan approval process will require documentation such as proof of income, employment history and clean credit report.
• Once approval you’ll sign a loan agreement with the bank which outlines the terms, interest rates and repayment schedule.

Make an offer and agree on terms

• Once you’ve identified the property you can try to negotiation on price and terms.
• Sign a Letter Of Offer (LO) to show your intention to purchase the property when you have finalized the agreed price, terms and payment details

Sale and Purchase Agreement

• After signed the letter of offer you’re hire a lawyer to review and drat the SPA, the lawyer will also handle the due diligence checks ensuring that the property is free from any legal issue and encumbrances.
• At this point you will pay a 10% deposit of the property purchase price.

Stamp Duty

Stamp duty is payable within 30 days of signing the SPA, the stamp duty is payable to the Inland Revenue Board (LHDN) and must be settled before the property title is transferred. It’s calculate as follow;

• 1% of the first RM100,000 of the purchase price
• 2% on the next RM400,000
• 3% on the remaining amount above RM500,000

Finalizing Property Transfer

• The lawyer will submit the necessary documents for the property transfer at the Land Office after fully paid purchase price and stamp duty.
• For landed property you will receive the Title Deed and the Strata Title for condos and apartments.

Taking Possession

• Once the property transfer is completed you can take possession of the property, if it’s a new development you may wait for the completion of the building and any necessary inspections.

.

Ongoing Cost and maintenance

• If you financed your home with a loan make sure you stay on top of your monthly payments
• You will need to pay an annual assessment tax ( Cukai Pintu ) to the local municipal council and Quit Land (Cukai Tanah).
• If you own a condominium or apartments you will need to pay monthly maintenance fees to cover the upkeep of common areas and facilities.

Additional Consideration

• If you decide to sell your property within five years you may be liable to pay Real Property Gain Tax (RPGT) on the capital gains make from the sale.
• It’s wise to have home insurance to protect your property against damages such as fire or natural disasters.

By following these steps you can successfully purchase a home in Malaysia , It’s always advisable to engage professionals such as a real estate agent and lawyer to guide through the process.