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 expand, 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.

The answer is, yes, a foreign expatriate is allowed to 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:

As stated in the National Land code 1965, foreigners are not allowed to purchase agricultural land – but in respect of building land or agricultural land gazetted for development, they are allowed to do so after receiving consent from relevant state authority.

In general, a minimum property value of MYR 1 million is applied to all types of properties in every state. However, it also depends on the respective state authority if they wish to amend the minimum value accordingly.

Minimum Selangor property purchase price for foreigners in 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 year 2022

For Penang Island houses, the selling price for landed is at 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 year 2022

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

Minimum Sabah property purchase price for foreigners in year 2022

Effective from January 2020, foreigners are allowed to purchase residential properties in Sabah with starting price of MYR 750,000 which was previously stated as MYR 1 million.

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

The procedure depends on where the foreign expat wishes to purchase a property from as each states have their own regulation and procedure to abide to. However, the general procedure is as below:

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:

4. Within 14 days from the date of signing of 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 to provide the following documents to the solicitor:

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

7. Pursuant to 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 may be approved 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 in accordance with the terms of the SPA.

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

This program is suitable for foreign expats that 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:

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%.