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An Expat’s Guide to Buying Property in Malaysia

If you are reading this, you have either just accepted an offer to relocate to Malaysia and want to buy your own place right at the start, or have stayed in Malaysia for a number of years and are ready to purchase your first ever property here.

Regardless, you have made the right choice in purchasing a property in Malaysia. Why?

5 reasons to buy property in Malaysia

  1. Affordable and of great value, with the amount of ringgit that you can get for your currency
  2. Low buying cost – a down payment is typically 10% of the property price. Developers also often entice buyers with ‘pay nothing for the first 2 years’ or similar promotions
  3. No restrictions on fund transfer to Malaysia. This means you could even buy your property in cash
  4. Relatively lower Real Property Gains Tax (RPGT) compared to other countries in the region
  5. Easily available financing and an international residency scheme to encourage and facilitate property purchase by foreigners

What are expats allowed to buy?

Knowing these before you embark on the search is important to steer your direction. It is perhaps easier to list what you CANNOT buy instead:

  • Property values at less than RM1 million. Different states have different minimums but most are at RM1 million. However, if you have a Malaysia My 2nd Home (MM2H) visa, you’d get to purchase lower priced property.
  • Property allocated to bumiputera (indigenous Malays) or built on bumiputera land
  • Most agricultural land
  • Property with individual titles, ie.landed properties (applies in Selangor only)

Financials for expatriate’s property investments?

Apart from the obvious cash option, there are a number of financing schemes with some especially tailored for foreigners. It is easy to apply for a home loan from any local or foreign bank, and get up to 70% margin of financing (MoF). You can even get up to 90% MoF if you’re a MM2H visa holder.

It is easy to apply for a home loan in Malaysia, especially when the banks are apparently very welcoming to expatriates. The procedures are simple and do not differ much than that if you are a local; you would usually need to submit a copy of your passport and visa, latest 3-6 months salary slips and  Sales & Purchase agreement or booking receipt from developer.

MM2H sounds good, what is it?

Under the Malaysia My 2nd Home (MM2H) initiative, the government issues a 10-year visa to expatriates to encourage long-term stay in Malaysia. If your plan is indeed to stay in Malaysia for more than 10 years, you should take up the scheme because:

  • you get to purchase properties that cost less than RM1 million
  • you can get a higher margin of financing
  • you get to withdraw up to 50% of the required MM2H fixed deposit to finance your property

Now that you have an idea of how much your property should cost and where the money can come from, you are ready to ask..

Where do expats usually stay?

Besides being close to your workplace in a good and convenient neighbourhood, there are other factors that you should consider, being an expat. Does the area have schools for your children? Is it easy to buy groceries and supplies that you are familiar with? Are there entertainment and lifestyle spots that you could relax and unwind at? As much as you should integrate with the community, are there fellow countrymen in the area that you could get support and bond with?

Therefore, you choose an area that can best help you settle and fit in, especially if you are new to the country. And which areas would that be?

  • Mont Kiara

Mont Kiara is almost synonymous with expatriate living. The area is especially popular with expats from the EU and US. Garden International School, Mont Kiara International School and the French School of Kuala Lumpur are located within the neighbourhood, which is a mere 10km from KL city centre. Mont Kiara is also popular among the Japanese as the Japan School of Kuala Lumpur is also located in the vicinity.

  • KL Sentral

KL Sentral is popular with the Indian community due to its close proximity to Brickfields, also known as Little India. The location is perfect for getting around by public transport, as KTM Komuter, Putra LRT, Monorail and KLIA Express all have a station here. The Muzium Negara MRT station is also within walking distance. Nu Sentral is the go-to place for shopping and dining.

  • Ampang

Ampang has such a high concentration of Korean expatriates that it has earned the nickname of Korea Town. Numerous Korean supermarkets, salons and specialty stores have sprouted here. Education choices are abundant – International School of Kuala Lumpur, Mutiara International Grammar School, Sayfol International School and Fairview International School.

Of course, these are mere suggestions of expat ‘enclaves’ where expats usually live and mingle especially upon arrival in the country. More expats have been driven to live in KL’s outskirts and even beyond to the greater Klang Valley, as there is a growing presence of international schools and due to the possibly inflated prices in the abovementioned areas. For more information about investment, check out when to sell, when to  hold, investing in condominium or danger investing in overseas properties