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For many foreigners, especially Singaporeans, Malaysian property is an affordable alternative to what they can normally buy back home. Here’s what to look out for if you intend to buy property there.

The reality of real estate

There are certain types of Malaysian property foreigners are not allowed to purchase: these include non-strata residential property, real estate acquired via public auction, low- to medium-cost residential units, and properties distributed to bumiputera. In addition, foreigners are not allowed to buy Malay Reserved land or properties built on such land.

However, foreigners can actually own a wide variety of property types: condominiums, flats, landed homes such as bungalows and terraced houses, studio apartments, commercial and industrial property, and agricultural and industrial land.

It’s all about the money

There is a minimum purchase price for foreign buyers who wish to own real estate in Malaysia. In most states, such as Kuala Lumpur, Melaka, Sarawak, Sabah and Johor, the property must cost at least RM1 million (S$332,086). In Selangor, this figure stands at RM2 million (S$664,172); likewise in Penang if you are buying property on the island. But if you are buying property on the mainland, the minimum price is RM1 million.

However, the Malaysia My Second Home (MM2H) scheme allows foreigners to live in Malaysia and in certain states, buy property there for lower prices. In Sabah, Kelantan and Melaka, for instance, foreign MM2H participants need spend a minimum of only RM500,000 (S$166,043) on a property, instead of the minimum other foreigners must spend. In Perak and Sarawak, this figure is even lower at RM350,000 (S$116,218) and RM300,000 (S$99,620) respectively.

The law back home

Apart from property laws in Malaysia, you must also take into account the laws in your home country. If you are a Singaporean HDB homeowner, for example, you can only buy private residential property (in Singapore or overseas) after you have fulfilled the five-year Minimum Occupation Period (MOP) for your flat.

The rules are more relaxed when it comes to owners of private housing, but make sure you are thoroughly familiar with all the laws in both your home country and that of the country in which you wish to purchase property.

Source: PG