Buyers' Guide To Malaysia

Before going ahead with a property purchase in Malaysia, it is important to be familiar with the buying process and what fees and agreements will need to be met. Below is a general overview of what procedures to expect.

Unlike some of its Asian neighbors, Malaysia makes it fairly easy for foreigners to purchase real estate. The Malaysian government is constantly looking to improve conditions for people wishing to purchase property in the country and this is of course good news to foreign investors.

What You Can Buy

Foreigners are allowed to purchase any kind of property with a minimum value of MYR 250,000 (US $67,977) and can buy up to two residential properties – two condominiums (max. 50% foreign ownership within a block) OR one condominium and one of the following:

  • Terraced or linked houses above two storeys
  • Land/bungalows and semi-detached houses

Should you wish to purchase a third property, you will need to apply to the Foreign Investment Committee of the Economic Planning Unit at the Prime Minister’s Department and provide a valid reason for the third purchase for permission to be granted. Property on Malay reserved land cannot be owned by overseas foreign investors. Other than these restrictions foreign owners of property are treated in the same way as Malaysian owners and both are protected by the same real estate laws.

Using an Agent

A good agent can prove invaluable when you buy a property in Malaysia. always carefully examines your particular requirements and provides you with a selection of appropriate options in your chosen country. In addition, we can recommend all related professional services you will require in Malaysia to make a safe purchase. Most of our properties for sale in Malaysia are within off-plan developments located near Port Dickson and in Kuala Lumpur, as they offer the best value for money and represent general demand from international property investors in Malaysia.

Appointing a Lawyer

As mentioned above, foreign investors interested in the Malaysian property market are subject to certain restrictions on the type of real estate they can purchase while great care and attention to detail have to be given to the entire buying process in Malaysia.

Legal fees and disbursements for the preparation of applications to the Foreign Investment Committee and the sale and purchase agreement are calculated at a percentage of the value of the property. Should you plan to take up financing from a bank, remember that you will also have to pay legal fees and disbursements for the preparation of the loan documents. A full breakdown of fees is described below.


When looking for property for sale in Malaysia it is wise to have a structural survey carried out on any property that meets the investor’s objectives because many homes are known to have structural problems and they may not be apparent at first glance. Once you are satisfied your chosen real estate is sound, you can then sign an offer letter that will be submitted to the vendor for acceptance.

The Buying Process

Once you have selected your property, a Letter of Offer and Acceptance is signed and a 3% deposit payment is normally expected from the purchaser.

Within 14 days, the buyer must pay a further 7%. Deposits paid are non-refundable if the buyer withdraws from the sale but are subject to obtaining finance and checking of title deeds. Make sure that there is a clause added to the standard agreement, stating that if the vendor pulls out, they must pay back the deposit plus an amount equal to that to the investor for the inconvenience. From the date of the signing, the buyer normally has a maximum of three months to complete the sale and make full payment.

Upon signature, the Sale and Purchase Agreement must be stamped at the Stamp Office. After examination of the property by the valuation department, Stamp Duty must be paid to the Stamp Office. The Sale and Purchase Agreement is then sent to the land registry along with the Memorandum of Transfer form 14A to transfer the title deeds into your name.

Transaction Costs and Fees

Who Pays?
Stamp Duty 1% - 3% buyer

Lawyer/Solicitor's Fees

First 150,000


Next 850,000


Next 2,000,000


0.4% - 1% buyer

Next 2,000,000


Next 2,000,000


where the consideration or adjudicated value is in excess of MYR7,500,000

negotiable on the excess (but shall not exceed 0.4% of such excess)

Other Fees MYR180 (US$49) buyer
Real Estate Agent's Fees 2% - 2.75% seller

Costs paid by buyer

1.4% - 4%

Costs paid by seller

2% - 2.75%


3.4% - 6.75%

* Malaysian currency is the Ringgit. Exchange rate is US$1=MYR3.6777 as of 26th October 2006.


As a foreigner, you are allowed to borrow up to 80% LTV from banks in Malaysia and they are eager to lend to overseas borrowers. With interest rates currently amongst the lowest in Asia, at 3.5%, property purchase in Malaysia is now an attractive option for many investors.

The mortgage application process takes longer than in many other countries and you would be well advised to extend the three month period from your initial deposit payment to final signature of the Sale and Purchase Agreement, to allow for normal delays in obtaining your Malaysian loan.

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