Can Employment Pass Holders Buy Property in Malaysia?

Malaysia is one of the most hassle-free countries in Asia for expats and foreigners who are on the lookout to acquire properties. For employment pass holders, they are allowed to continue living in Malaysia for up to 5 years as they are bonded by the employment contract with a Malaysian-registered Company.

As Malaysia’s economy continuously expands, the country indirectly provides a better place of investment for foreign investors, especially for the property markets.

Whether you are an expatriate or foreigner living in Malaysia with a valid employment pass, buying properties here is possible. The differences between a local and foreign buyer lie in the amount that an expatriate needs to have in their savings as well as the purchase price of the property. There is no limit on the number of properties a foreigner can purchase, and aside from certain rules and regulations, the whole buying process for a foreigner is the same as a local buyer.

Are foreign expatriates allowed to purchase properties in Malaysia?

The answer is, yes, a foreign expatriate can purchase properties in Malaysia so long as they meet the requirements imposed by the government.

They are not eligible to purchase a property in Malaysia if:

• The value is less than MYR 1 million
• The property is built on Malay Reserved Land
• It is a low and medium-cost residential unit as defined by the state authority
• State authorities allocate a portion of the property to Bumiputera interests

The National Land Code 1965 restricts foreign ownership of agricultural land.

Minimum Property Purchase Price for Foreigners

A minimum property value of MYR 1 million typically applies nationwide, with individual state authorities holding the power to adjust this threshold.

Minimum Selangor property purchase price for foreigners in the year 2022

The state selling price in Selangor Zones 1-3 is at RM 2 million. For Zone 3, it is RM 1 million for MM2H holders.

Minimum Penang property purchase price for foreigners in the year 2022

For Penang Island houses, the selling price for land is RM 1.8 million and RM 800,000 for strata title homes. The price for MM2H holders no matter the property type is RM 1 million.

For Penang mainland homes, it costs RM 750,000 to purchase a landed property and RM 400,000 to purchase a strata title property.

Minimum Negeri Sembilan property purchase price for foreigners in the year 2022

Foreigners can now purchase landed homes with a starting price of MYR 1 million instead of the previously announced MYR 2 million.

Minimum Sabah property purchase price for foreigners in the year 2022

Sabah sets a minimum purchase price of MYR 750,000 for foreign residential property buyers, effective January 2020.

Foreigners are allowed to purchase residential properties in Sabah with a starting price of MYR 600,000 for high-rise and strata titles. RM 1 million is the minimum for landed title properties.

land – but concerning building land or agricultural land gazetted for development, they are allowed to do so after receiving consent from the relevant state authority.

Procedure for foreign expatriates to purchase property in Malaysia

The procedure depends on where the foreign expat wishes to purchase a property from as each state has its regulations and procedures to abide by. However, the general procedure is as follows:

1. Sign the developer’s sales form or the offer to purchase form with the vendor, for sub-sale transactions.

2. Apply for financing to purchase the property (if necessary)

3. Provide the following documents to the solicitor:

• • Photocopy of latest passport
  • Correspondence address (eg: latest utility bill) and contact number (local Malaysia number)
  • Income tax number & the place of submission of the income tax (applicable for sub-sale purchase only).

4. Within 14 days from the date of signing the sales form (or offer to purchase), sign the Sales & Purchase Agreement (SPA), deed of the mutual covenant (if applicable) and other transactional documents. Pay the 10% deposit to the developer/vendor.

5. Solicitor to apply for state authority consent. Purchaser is to provide the following documents to the solicitor:

• A certified true copy of the SPA (1 copy)
• A certified true copy of the Foreign Purchaser’s passport (1 copy)
• Certified true copy of the constitution (if the purchaser is a foreign company) (1 copy)
• Latest quit rent and assessment receipt of the property
• Application form under Section 433B of the NLC

6. Pay the balance purchase price by the Third Schedule of Schedule Housing Development (Control and Licensing) (Amendment) Regulations 2015 (“Schedule H”) or the SPA.

7. Under Schedule H, the developer shall deliver vacant possession of the property within 36 months from the date of the SPA (or such later date as can be confirmed by the relevant authority). Upon delivery of vacant possession, the developer shall deliver the strata title and certificate of completion and compliance to the foreign buyer. In the case of a sub-sale transaction, the vendor shall deliver vacant possession to the purchaser by the terms of the SPA.

Is there a way to purchase a home at a lower price for foreign expats?

If your initial plan is to purchase a property for retirement purposes, then applying to the Malaysia My Second Home (MM2H) programme is the most suitable option available for you.

This program is suitable for foreign expats who wish to remain in Malaysia for more than 10 years.

The table below shows the differences if you purchase a property as a foreign expat with MM2H and without it:

Ways to Finance the Purchase of Properties as a Foreigner

Generally, there are 2 ways to finance the purchase of properties in Malaysia as a foreigner.

The first way is to bring in your own money from your home country to finance the purchase. This is the easiest and direct approach as non-Malaysians are allowed to keep accounts with banks in Malaysia without any restriction on the amount of Ringgit held in the accounts.

Another way is to take up a loan with a bank in Malaysia. With sound credit ratings, most foreigners should have no issue in obtaining the Margin of Financing (MOF) of 70% with banks here. This might be even higher depending on the banks and financial standings of the applicants. In Malaysia, the average interest rate of mortgage loans is currently between 4% and 5%.