Malaysia Real Estate: A Guide to Renting or Buying Property

Malaysia Real Estate: Malaysia is a popular destination for expatriates, retirees, and investors due to its affordable real estate market, foreigner-friendly property laws, and high quality of life. Whether you’re looking to rent or buy, understanding the legal framework, costs, and procedures is essential.

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Renting Property in Malaysia

Finding a Rental Property

Foreigners can rent apartments, condominiums, landed houses, or serviced residences. The most common ways to find rental properties include:

1. Online Listings – Popular websites include PropertyGuru, iProperty, Mudah.my, and StarProperty.
2. Real Estate Agents – Working with an agent can help navigate lease negotiations.
3. Expat Communities & Facebook Groups – Many landlords advertise rentals on expat forums and social media.

Rental Agreements & Requirements

• Standard lease duration: 6 months to 2 years.
• Security deposit: Typically 2 months’ rent + 1 month for utilities.
• Advance rent payment: Usually 1 month upfront.
• Lease agreements should include:
  • Rental price and payment terms
  • Lease duration and renewal conditions
  • Responsibilities for utilities and maintenance

Average Rental Prices (2024 Estimates)

City	1-Bedroom Apartment (USD)	3-Bedroom Apartment (USD)
Kuala Lumpur	$500 – $2,500	$1,000 – $4,000
Penang	$400 – $1,500	$800 – $3,000
Johor Bahru	$300 – $1,200	$700 – $2,500
Kota Kinabalu	$300 – $1,000	$600 – $2,000

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Buying Property in Malaysia as a Foreigner

Can Foreigners Buy Property in Malaysia?

Yes, foreigners can legally own property in Malaysia, including condominiums, serviced apartments, and landed houses, but with some restrictions:

1. Minimum Purchase Price – Foreigners can only buy properties above RM 1 million (~$210,000 USD) in most states.
2. Restricted Property Types – Foreigners cannot buy Malay Reserved Land or low-cost government housing.
3. Freehold vs. Leasehold –
   • Freehold properties allow indefinite ownership.
   • Leasehold properties (99-year leases) require renewal after expiration.

Steps to Buying Property in Malaysia

1. Select a Property

• Decide between a condo, house, or serviced apartment.
• Consider location, amenities, and resale value.

2. Hire a Lawyer & Real Estate Agent

• A real estate agent helps find properties and negotiate prices.
• A lawyer ensures a legal and smooth transaction.

3. Apply for State Authority Approval

• Foreigners must get approval from the state government, which takes 3-6 months.

4. Sign the Sale & Purchase Agreement (SPA)

• Pay a 10% deposit upon signing the agreement.
• The lawyer ensures due diligence on ownership and legal status.

5. Transfer of Ownership & Payment

• Pay the remaining 90% balance within 3 months.
• The lawyer registers the title deed with the Malaysian Land Office.

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Costs of Buying Property in Malaysia

Taxes & Fees for Buyers

Expense	Cost
Stamp Duty (1st RM 1M)	1%
Stamp Duty (RM 1M – RM 2.5M)	2%
Stamp Duty (Above RM 2.5M)	3%
Legal Fees	1% – 2% of property price
Real Estate Agent Fee	2% – 3% of property price
State Authority Approval Fee	RM 10,000 – RM 30,000 ($2,000 – $6,500 USD)

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Financing & Mortgages for Foreigners

Foreigners can get a mortgage in Malaysia, but conditions apply:

• Down payment: 30% – 40% of the property value.
• Loan tenure: Up to 30 years (must not exceed age 70).
• Interest rates: Typically 4% – 5% per year.

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Key Considerations for Foreign Buyers

Residency and Ownership

• Buying property does not automatically grant residency.
• Foreigners can apply for the Malaysia My Second Home (MM2H) Visa, which allows long-term residence.

Legal Restrictions

• Foreigners cannot buy Malay Reserved Land or low-cost properties.
• Some states have different minimum price thresholds for foreign buyers.

Best Cities for Real Estate Investment

1. Kuala Lumpur – Business hub, high rental demand.
2. Penang – Popular for retirees and beachfront properties.
3. Johor Bahru – Growing due to its proximity to Singapore.
4. Iskandar Malaysia – Special economic zone with large-scale developments.
5. Kota Kinabalu – Tourism hotspot with beachfront properties.

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Frequently Asked Questions (FAQ)

1. Can foreigners buy land in Malaysia?

Foreigners cannot buy Malay Reserved Land but can own freehold and leasehold properties.

2. Can I get a mortgage as a foreigner?

Yes, but most banks require a 30% – 40% down payment and proof of income.

3. Can foreigners rent out property in Malaysia?

Yes, but rental income is subject to Malaysian income tax (10% – 30%).

4. What is the minimum property price for foreign buyers?

• RM 1 million (~$210,000 USD) in Kuala Lumpur and most states.
• Some states like Johor require a minimum of RM 2 million.

5. Does buying property in Malaysia grant residency?

No, but investors can apply for the Malaysia My Second Home (MM2H) Visa, which offers long-term residency.

6. What is the best city for buying property in Malaysia?

• Kuala Lumpur for high-end condos and city life.
• Penang for beachfront properties.
• Johor Bahru for investment due to proximity to Singapore.

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Conclusion

Malaysia offers a foreigner-friendly property market, with opportunities for both homeownership and investment. While foreigners face some restrictions, buying condominiums and serviced apartments is straightforward. Rental properties are also widely available, making Malaysia an attractive destination for expatriates and investors. Working with a lawyer and real estate agent ensures a smooth transaction process.

Meet An Expert

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