Foreign investors love the Malaysian real estate market because it offers reasonable prices along with a dynamic rental market and it occupies a prime position in Southeast Asia. Foreigners have the ability to acquire real estate properties in Malaysia. Foreigners can acquire property in Malaysia under certain rules and limitations that need to be understood.
Each Malaysian state controls foreign property purchases through minimum price restrictions that start between RM1 million and RM2 million. These rules safeguard Malaysian real estate properties and guarantee that foreign investments generate beneficial outcomes. The minimum property prices in Kuala Lumpur stand at RM1 million while owners in Penang must spend at least RM3 million.
Foreign property buyers encounter additional limitations that bar them from obtaining low-cost housing or real estate located in specific designated zones. Local real estate agents or legal professionals should be consulted because they will help understand these specific regulations.
Stamp duty payments represent 1-4% of property cost while legal fees together with other transaction expenses need consideration. Through proper legal knowledge and financing arrangement Sarah achieved a smooth and profitable condo investment in Penang after her purchase as a foreign buyer.
Foreign real estate investors who follow established rules will experience smooth and lucrative investments in Malaysia
Can Foreigners Buy Property in Malaysia?
Foreigners have the right to purchase Malaysian property under certain limitations enforced by the local authorities. Foreigners who want to invest in Malaysian properties must understand the specific legal framework to ensure their investments progress without complications.
Foreign Ownership Laws in Malaysia
Foreigners can acquire property ownership in Malaysia under government regulations that defend local real estate buyers and manage foreign real estate investors activities. The property ownership laws differ between Malaysian states since the regulations in Kuala Lumpur do not apply to Penang or Johor.
Restrictions on Property Types
Foreigners face restrictions when purchasing particular kinds of properties in Malaysia.
Foreigners cannot acquire property from Malay Reserve Land because it remains exclusively available to ethnic Malay citizens.
Bumiputera Lots are properties that belong to the Bumiputera population including indigenous Malays and natives of other ethnic groups and remain restricted for foreign real estate investors buyers.
Low-Cost or Affordable Housing properties serve as a protected zone for Malaysian citizens to guarantee their affordability.
Foreigners can obtain both freehold and leasehold property rights but the regulations regarding freehold ownership differ between Malaysian states.
The freehold condominium purchase made by Sarah from Singapore in Kuala Lumpur became possible due to her meeting the RM1 million minimum price set by the state. She took precautions to avoid Foreigners buying low-cost housing property in Malaysia 2025 and made sure the property was not included in Malay Reserve Land.
Minimum Price Requirement
Foreigners are required to buy properties above a certain price, typically set between RM1 million to RM3 million, depending on the location. This helps ensure that foreign investments contribute to the higher-end market, rather than displacing local buyers in the affordable housing sector.
By keeping these Malaysia property rules for foreigners in mind, foreign real estate investors can navigate the Malaysian property market successfully while complying with local laws.
Minimum Property Price for Foreign Buyers (2025 Update)
Foreigners interested in Malaysian real estate must know the different minimum property purchase requirements that depend on both property type and state location. The regulations exist to protect local homebuyers through targeted higher-end market investments by foreigners.
State-by-State Minimum Price for Foreigners
Kuala Lumpur: Foreign real estate investors in Kuala Lumpur need to spend at least RM1,000,000 to purchase property in the capital. Foreign property ownership requirements extend to both residential buildings with ground floors and condominiums. Foreigners choose Kuala Lumpur because it holds a dynamic economy and modern conveniences and lies close to major international centers. Any prospective KL condo buyer should check their property price against this minimum threshold since it represents the regulatory requirement.
Selangor: The minimum property prices in Selangor depend on the specific property type as follows:
- RM2,000,000 for landed properties
- RM1,500,000 for high-rise or stratified properties (e.g., apartments, condos). Foreigners who want city amenities in a residential environment should consider Selangor because of its proximity to Kuala Lumpur.
Penang: The minimum prices in Penang show different thresholds based on which property category you purchase.
- RM1,000,000 for stratified (condo or apartment) properties
- RM3,000,000 for landed properties. Known for its scenic landscapes and cultural appeal, Penang is a hotspot for foreigners seeking a more laid-back yet cosmopolitan lifestyle.
Johor: The minimum property price for foreign real estate investors to purchase in Johor stands at RM1,000,000 which provides investors with entry-level opportunities particularly in Johor Bahru near Singapore.
Sabah and Sarawak: The minimum property prices in Sabah and Sarawak operate independently from other states. Local authorities and state land offices need to be consulted for obtaining precise and recent information about property prices.
Pro Tip: Always Confirm the Rules
The pricing system for minimum prices shows variable changes while special circumstances exist. Foreigners buying luxury condos in Malaysia in high-demand locations must follow alternative Malaysia property rules for foreigners. Before foreigners buying property in Malaysia 2025 you must get advice from state land offices or legal experts to verify that your purchase adheres to all requirements.
Foreign property purchasers like Emma successfully navigated the purchase process of a foreigner buying a Penang luxury condo in Malaysia because she obtained a clear understanding about pricing regulations beforehand.
Buying Process: Step-by-Step Guide
The process of purchasing Malaysian property for foreigners follows an orderly structure that contains specific steps for maintaining compliance with national laws and guidelines. The process to buy Malaysian property as a foreigner includes these:
Step 1: Check Eligibility & Minimum Price
Your property search must begin by checking your eligibility status together with the state-specific minimum purchase requirements for foreign citizens in the area of your intended purchase. Each state maintains its own set of Malaysia property rules for foreigners and foreign ownership regulations differ from place to place. Foreign real estate investors in Kuala Lumpur need to spend at least RM1,000,000 on their properties yet Penang requires a minimum purchase of RM3,000,000 for landed properties. Check that your target property satisfies these requirements to prevent future difficulties.
Step 2: Sign the Sale & Purchase Agreement (SPA)
After finding your desired property you should sign the Sale & Purchase Agreement (SPA). Hiring a lawyer to write and examine the SPA becomes necessary to ensure Malaysian regulations regarding foreign property ownership are properly incorporated. The property price requires a 10% deposit as part of the deal when you sign the agreement to maintain your purchase rights.
Step 3: Apply for State Consent
Foreign real estate investors must secure state authority approval for their property purchase in the specific area where the property is located. The state approval duration spans from two months up to six months depending on which state handles the application. The Selangor state administrative procedures required four months for Robert from the UK to receive state consent when he purchased property in the region.
Step 4: Finalize Payment & Ownership Transfer
The next step becomes possible after states grant their approval to proceed. Foreign real estate investors must complete payment by covering stamp duty between 1-4% of property value together with legal expenses and the full purchase price. The completion of property ownership transfer requires you to register your property at the Land Office.
Foreign real estate investors who follow these guidelines will experience smooth property transactions in the Malaysia market.
Costs & Taxes for Foreign Property Buyers in Malaysia
Foreign individuals who buy Malaysian property must cover various initial payments together with tax obligations and regular maintenance expenses. Knowledge of all expenses associated with property investment will help achieve successful acquisition.
Upfront Costs
- Stamp Duty: Stamp duty operates as a tax structure that elevates in proportion to the property value. Properties worth less than RM100,000 are taxed at a rate of 1% according to the stamp duty regulations. The taxation rate for properties within RM100,001 to RM500,000 stands at 2% while properties above RM500,000 face a 3% rate. When purchasing a property worth RM1,000,000 you must pay the stamp duty tax amounting to RM24,000.
- Legal Fees: The cost of legal fees amounts to between one percent and two percent of the property buying price. The legal costs for a RM1,000,000 property should be between RM10,000 and RM20,000. Employing an experienced lawyer becomes essential to guarantee proper execution of legal documents during the process.
- State Consent Fee: State consent fees for foreign property purchases differ according to location and amount to between RM10,000 to RM50,000. It generally ranges from RM10,000 to RM50,000. The consent fee for property purchases in Penang exceeds the costs observed in Johor and Kuala Lumpur as well as other states.
- Real Property Gains Tax (RPGT):The Malaysian tax authority requires capital gains from property sales within five years to be taxed at a rate of 30 percent RPGT. The 30% RPGT rate from Malaysia should be taken into account when planning to sell the property before reaching the 5-year mark.
Ongoing Costs
- Quit Rent & Assessment Tax: Property values determine the basis for local government taxes known as quit rent. The quit rent payment system operates based on annual charges which differ according to property location and type.
- Maintenance Fees & Sinking Fund: Foreigners buying a condo or apartment in Malaysia include monthly maintenance payments as well as contributions to a building repair fund known as the sinking fund. The amount of maintenance fees and sinking fund payments for condominiums varies between RM100 and RM1,000 and above based on property type.
- Foreign Exchange Considerations: The Malaysian Ringgit exchange rate fluctuations might impact your total purchase cost since you will be paying in this currency. Your purchase price will potentially rise when the currency exchange rate moves negatively from your native currency to the MYR.
Example:
Sarah purchased a condominium in Kuala Lumpur with her RM1,200,000 investment funds as an Australian foreigner. The total expenses for her purchase reached RM66,000 with stamp duty at RM36,000 and legal fees at RM15,000 and state consent payments of RM15,000 while maintenance fees amount to RM500 per month.
The knowledge of these costs allows you to create better financial plans for your Malaysian real estate investment.
Financing & Home Loan Options for Foreigners
Can Foreigners Get a Mortgage in Malaysia?
Yes, foreigners can secure a mortgage in Malaysia, but there are some key limitations and requirements to keep in mind.
Loan-to-Value (LTV) Ratio
International homebuyers need to provide between 50% to 70% of the property cost as a down payment. Foreign real estate investors need to supply a larger initial payment than local homebuyers do when securing a mortgage. When foreigners buying property in Malaysia 2025, a property for RM1,000,000 you will receive financing up to RM700,000 so you need to provide the remaining RM300,000.
Visa and Employment Requirements
Foreign real estates investors accessing a mortgage need to show either their employment pass or their MM2H (Malaysia My Second Home) Visa. The legal residence requirement along with stable income verification guarantees your position as a resident of the country. Employed individuals need either a work permit or visa to obtain access to financing options.
Banks Offering Financing
Foreigners can obtain home loans from both domestic and international banking institutions among which HSBC and UOB are prominent members. Foreigners and foreign investors can choose from specialized home loan products that these banks provide. Homebuyers should explore different banks since various offers with differing interest rates and terms exist between financial institutions.
Example:
John sought to buy property in Johor Bahru while residing abroad from the United Kingdom. John obtained his mortgage from HSBC through which he received financing at an LTV ratio of 65%. The down payment requirement reached 35% which exceeded the standard local range between 10-20%.
Pro Tip:
Be prepared for higher down payment requirements (30-50%) compared to locals. It’s important to factor this into your budget when considering property options.
Best Property Investment Locations for Foreign Buyers
The most appealing areas for Malaysia real estate investment for foreigners in Malaysia exist where strategic positions combine with active economic environments and robust rental markets. These areas represent the most popular choices for foreign real estate investors to put their money into Malaysian real estate investment for foreigners:
Kuala Lumpur
Foreign property buyers choose Kuala Lumpur (KL) as their favored destination because it combines contemporary infrastructure with urban living and attractive rental possibilities. Expats and investors choose KLCC and Mont Kiara and Bangsar as their preferred areas in Kuala Lumpur. The Mont Kiara and Bangsar regions near KLCC attract foreign buyers with exclusive city skyline views and premium amenities and active expat communities and local international schools for sustainable investment.
Penang
People who want to buy properties that blend panoramic landscapes with cultural heritage choose Penang as their investment destination. The UNESCO World Heritage site of George Town brings in foreign property buyers through its colonial buildings and Batu Ferringhi draws them with its oceanfront real estate and beach lifestyle. International investors frequently select Penang as their destination because it provides both holiday properties and lucrative rental opportunities.
Johor Bahru
Foreign investors find Johor Bahru across from Singapore borders a profitable venture. Real estate in Singapore operates at a high level due to strong rental property interest from both domestic residents and foreign workers in the country. The real estate properties in Johor Bahru provide better affordability than Singapore thus attracting investors who seek long-term investments alongside strong rental income.
Iskandar Malaysia
Foreign investors increasingly show interest in Iskandar Malaysia which represents the rapidly developing area near Singapore. Iskandar presents substantial capital growth potential because of its extensive infrastructure activities, industrial park construction and planned residential initiatives. Local and international buyers are drawn to this area because it has developed into a significant business and residential center.
Example:
Sophia, a foreign investor from Australia, purchased a property in Mont Kiara after researching the area’s potential for high rental income. She found that the area’s proximity to international schools and its expat-friendly environment made it an ideal investment for her long-term goals.
By targeting these prime locations, foreign buyers can maximize both the value and return on investment of their property in Malaysia.
Alternative Visa & Residency Options for Foreign Buyers
The process of acquiring Malaysia real estate investment for foreigners requires clear knowledge of visa and residency options. These programs let investors purchase real estate properties while allowing them to stay in Malaysia for extended periods which attracts retirees and investors and expatriates. Foreign property buyers in Malaysia have access to different visa options as follows:
1. Malaysia My Second Home (MM2H) Program
Foreign buyers consider the Malaysia My Second Home (MM2H) property purchase program as their preferred long-term visa option. The social visit pass under this program grants foreigners multiple entries to live in Malaysia for up to 10 years with renewal possibilities. Real estate investors alongside retirees find the Malaysia My Second Home (MM2H) property purchase program highly attractive for their settlement in Malaysia.
- Property Purchase: Participants on the Malaysia My Second Home (MM2H) property purchase program must purchase residential homes costing at least RM1,000,000 throughout most areas according to state regulations. The specified price threshold directs foreign investors toward acquiring properties in the high-end segment.
- Financial Requirements: The visa application process requires financial documentation showing fixed deposits from USD 32,000 to USD 1 million based on applicant age and other specified criteria. The financial criteria guarantee applicants maintain enough funds to sustain their stay in Australia.
Many expats select the MM2H program as their preferred choice to live peacefully in Malaysia because Peter the British retiree utilizes it to stay long-term and buy property in Penang.
2. Sarawak MM2H (S-MM2H)
Sarawak MM2H (S-MM2H) functions as a state-based version of the national Malaysia My Second Home (MM2H) property purchase while requiring less financial commitments.
- Property Purchase: S-MM2H participants must invest at least RM600,000 to purchase real estate in Kuching Division but they can buy properties starting at RM500,000 in other divisions of Sarawak. Foreign purchasing interest in Malaysian real estate is boosted because this option allows them to choose from less developed yet beautiful areas.
- Financial Flexibility: The S-MM2H program permits investors access through more flexible malaysia property purchasing rules for foreigners and reduced financial requirements than the national Malaysia My Second Home (MM2H) property purchase program.
John, an Australian foreign investor, used the S-MM2H program to acquire property in Miri because it provided him with both the relaxed lifestyle of the area and Malaysian living advantages.
3. Premium Visa Programme (PVIP)
The Premium Visa Programme (PVIP) has launched a 20-year visa program for wealthy individuals with high net worth. The advantages of this program enable investors to acquire Malaysian property and business opportunities.
- Visa Duration: The PVIP grants visa entry for 20 years with an option for additional 20 years of renewal.
- Eligibility: To qualify for the PVIP applicants need stable offshore income reaching at least RM40,000 per month or RM480,000 per year yet age does not play a role in qualification.
- Investment Requirement:The application requires a RM1 million Malaysian bank fixed deposit that cannot be withdrawn during the first year of the program.
- Property Ownership: PVIP holders can buy any number of properties throughout Malaysia provided they meet the requirements for foreign property ownership. The PVIP allows investors to buy unlimited properties within Malaysian borders while following minimum foreign real estate investor Malaysia property rules for foreigners.
The PVIP program was selected by Liu, a Chinese entrepreneur, after he studied the advantages of long-term residency and properties across Malaysia.
The four visa options serve different purposes which depend on your investment needs and lifestyle choices. People interested in long-term residency along with urban property investment should choose Malaysia My Second Home (MM2H) property purchase while S-MM2H provides an economical option for those who want to live in Sarawak’s peaceful environment. High-net-worth individuals should consider the PVIP program because it enables them to purchase multiple properties alongside obtaining a long-term visa for Malaysia.
FAQs: Foreigners Buying Property in Malaysia
🔹 Can foreigners buy freehold property in Malaysia?
Yes! Foreigners have the right to purchase freehold properties throughout Malaysia while most properties held by foreigners are freehold. The ownership of freehold properties remains accessible to foreigners but specific limitations exist according to state and local laws.
🔹 How long does it take to buy a house in Malaysia as a foreigner?
The state approval process determines that Foreigners buying property in Malaysia 2025 requires an average duration of 3-6 months. The length of time needed for property acquisition differs according to the state regulations and property characteristics.
🔹 Do foreigners pay higher property taxes?
Property tax rates for foreigners remain equivalent to those of Malaysian citizens throughout the country. Non-citizens must pay a higher Real Property Gains Tax (RPGT) rate because it amounts to 30% when selling a property within five years of acquiring it.
🔹 Can a foreigner buy property in Malaysia without MM2H?
Yes! MM2H participants do not need to buy property in Malaysia yet they gain the benefits of long-term residency and simplified Malaysia property rules for foreigners.
🔹 How to improve home loan approval chances as a foreigner?
- Maintain a solid credit history.
- Provide stable income proof from a reputable employer.
- Opt for a larger down payment (50% is ideal).
- Choose foreign-friendly banks like HSBC or UOB, which offer specific products for expats.
Conclusion
The process of p Malaysia real estate investment for foreigners offers potential investment benefits although one must exercise proper caution in their decision-making. Every prospective buyer must verify Malaysia property rules for foreigners before acquiring Malaysia real estate investment for foreigners to satisfy local governance requirements. Every Malaysian state maintains separate regulations about property ownership minimums and restrictions for international buyers.
Obtain legal assistance from the beginning to handle both legal matters and state consent procedures which will ensure an efficient transaction process. Investors should evaluate the Malaysia My Second Home (MM2H) program because it provides additional benefits to those seeking long-term residency together with their property investment.
Select properties in Kuala Lumpur, Penang and Johor because these areas generate high rental returns and appreciation values. These locations provide dual appeal to both expat investors and domestic economic expansion because they have strong economic development and attract international investment.
Do you wish to purchase a home in Malaysia? Please seek guidance from property agents together with real estate attorneys to begin your investment journey that leads to decisions aligned with your targets. Happy investing!n, so that they can also get to take advantage of policies that promote financial security and social mobility.
