Over the past decade, quite a few expatriates in Malaysia have opted to purchase a residential property either as a second home or for retirement purposes.

A haven for many things, Malaysia is one of the most favored property markets in Southeast Asia, particularly in the past decade. Recently, the local media reported that Malaysia’s foreign buyers accounted for 10% to 15% of new and second-hand transactions in Malaysia’s largest cities. Many of these properties were residential units purchased as second homes, either for retirement or investment purposes. 

If you are one of those who have been smitten by the idea of putting down roots or expanding your investment portfolio in this country, here are some essential guidelines that can help you navigate your ventures in buying a house in Malaysia.

1. Can foreigners buy a property in Malaysia in 2022?

The National Land Code (NLC) 1965, one of the primary property laws in Malaysia, defines a foreigner as any natural citizen who is not a permanent resident of Malaysia. In principle, foreigners can own any type of property (residential unit – both landed and high-rise, commercial property and land, industrial property and land). The NLC also states a similar provision for foreign companies in acquiring property or land in this country.

As Malaysia is governed under a federal system, land matters lie within the state government’s jurisdiction. The rules in the states of Peninsula Malaysia differ from those of Sabah and Sarawak.

Each state has implemented different regulations governing foreign property acquisition, i.e. types of property and application procedures. However, there are three types of properties that foreigners are not eligible to purchase:

1. Properties built on Malay Reserved land
2. Low and medium-cost residential units as defined by the state authorities
3. As determined by state authorities, properties distributed to Bumiputera interest in any development project.

Foreigners are also not allowed to purchase agricultural land. Nevertheless, in respect of building land or agricultural land gazetted for development, they may do so after receiving consent from the relevant state authority.

2. How to buy a property under MM2H in 2022 

Unlike other countries, Malaysia offers a special avenue for foreigners to purchase homes via Malaysia My Second Home (MM2H) program. The scheme provides a renewable visa (5-year maximum) and applies to all the states in Peninsula Malaysia and Sabah (Sarawak has its own rule and requirement as the state controls their immigration). To learn more, check out this link: Sarawak MM2H (S-MM2H)

You will need to be sponsored by a Malaysian citizen and in Peninsula Malaysia, a registered MM2H agent can replace a citizen sponsor.

As MM2H visa holders, you will enjoy some benefits when it comes to owning houses in Malaysia, which include discounts on certain types of properties available in the market. 

The following are the revised requirements as of August 2021, applicable for those aged 35 and above:

In addition to the above, MM2H visa holders must be in the country for at least 90 cumulative days in a year.

Can a foreigner buy a property without MM2H?

In September 2022, Malaysia introduced a Premium Visa Program (PVIP), a long-term residency visa that enables foreign investors and entrepreneurs to live, work or study in this country.

Open to all age categories, the program provides visa approval for up to 20 years (valid for 5 years and issued at 5-year intervals up to a maximum of 4 times) and foreigners will be able to purchase real estate for residential, commercial or industrial purposes.

There are two main conditions a foreigner must meet to be eligible for PVIP:

1. An offshore income of RM40,000 per month or RM480,000 annually
2. A fixed deposit account of RM1 million with a licensed bank in Malaysia

All applications are required to be made through an authorized consultant or agency appointed by the Immigration Department of Malaysia. The participation fee for an applicant is RM200,000, while for every dependent is RM100,000. Payment of 10% initial participation fee of RM200,000 must be paid before the PVIP consultant/agency submits the online application. The remaining balance of the participation fee, pass fee, visa fee and security bond will be paid once the online application is approved.

The following documents also needed to be provided to the PVIP consultant/agency that will be uploaded through the online application:

1. The biodata page of the passport
2. The Certificate of Good Conduct
3. Resume, including the latest 3 months’ pay slip
4. Birth Certificate/legal documents (if accompanied by children)
5. Marriage/ Divorce Certificate
6. Letter of verification from Medical Specialist/General Practitioner
7. Approval from Royal Malaysian Police for security screening

All documents and certificates must be in English or translated into English, certified by the Malaysian Embassy/Consulate.

3. Minimum property price for foreign investment in 2022

Generally speaking, a minimum purchase value of RM1 million is applied to all kinds of property in almost every Malaysian state, except for 4 (refer to the table below). Now, you probably are asking some of these questions, such as what are the property prices in different states? Which cities have the most expensive houses?

It is safe to say that the average property price in Perak will not cost as much as in Selangor, but here is a quick reference of all the state’s minimum selling prices along with the prices available under the MM2H programme (residential properties only).