If buying property in Kuala Lumpur isn’t something to which you’ve given any thought, you really should reconsider. After all, Malaysia’s property market is open to foreign investment, and recent changes to the law will soon make it easier than ever to add a home in Kuala Lumpur — or Johor Bahru, Penang, or Melaka — to your portfolio.
Add to that a resilient economy, the ease of doing business, affordable property prices, low buying costs, financing options, and a lack of restrictions on the free flow of capital, and buying in Kuala Lumpur starts to seem like a no-brainer. Below, we’ve compiled the most important facts and figures you should know before you think about making any purchase. As always, be sure to seek professional legal advice as laws are subject to change, and to engage an experienced attorney to handle the paperwork.
What type of property can you purchase?
Unlike other, more restrictive economies, Malaysia allows foreign buyers to own unlimited freehold (full, permanent ownership) and leasehold (typically 99-year ownership) properties of any type, from apartments to single-family homes and so on — there are more than a dozen property categories in total. That being said, any acquisition of property by non-citizens or foreign companies requires prior approval from the relevant State Authority before it can be completed.
What’s the easiest way to finance the home?
There’s no limit on how much money foreign citizens can hold in accounts at Malaysian banks, so the easiest way to finance your new home purchase would be to arrange the funds in your home country and then transfer them. Alternatively, banks such as CIMB and UOB offer home loans designed for foreign buyers, so they’re a great place to start your search. Generally speaking, mortgage loans in Malaysia have average interest rates of 4-5%. Buying costs usually fall in the same range.
What’s the minimum purchase price?
Responding to an oversupply of properties on the market, the government recently announced that, for a one-year period starting from 1 January 2020, the minimum purchase price for property in urban high rises will be lowered from RM1 million (approx HK$1.89 million) to RM600,000 (approx. HK$1.14 million) for foreign buyers. There’s plenty of property to snatch up, too: Kuala Lumpur currently has RM2.05 billion worth of unsold units priced at RM600,000 and above, according to the Finance Ministry.
What else do I need to know?
If residing or retiring in Malaysia is something you’re considering, it’s best to apply for the Malaysia My Second Home (MM2H) Programme, which grants foreigners a 10-year visa plus access to more favourable financing rates as well as lower minimums on property purchases, though the actual figures vary from state to state. MM2H visa holders enjoy a host of other benefits as well, such as tax-free remittance of foreign income, ability to import a car, ability to bring a domestic helper, and more.