Foreign Real Estate Purchase in Malaysia: Complete Guide

Published on October 1, 2025 and written by Cyril Jarnias

Here is a comprehensive article about the real estate purchasing process for foreigners in Malaysia:

Malaysia is an increasingly popular destination for foreign investors looking to purchase real estate. With its dynamic economy, affordable cost of living, and diverse landscapes ranging from paradise beaches to modern skyscrapers, this Southeast Asian country offers many attractive opportunities. However, the property acquisition process for non-residents involves specific characteristics that are important to understand before getting started.

Can foreigners buy property in Malaysia?

The answer is yes, but with certain restrictions. Unlike other Asian countries, Malaysia allows foreigners to acquire real estate, whether for living purposes or as rental investments. However, there are specific rules to follow:

• Foreigners can only purchase properties with a minimum value of 1 million Malaysian ringgit (approximately $200,000) in most states. This threshold may vary by region, going up to 2 million ringgit in Kuala Lumpur.
• Purchasing agricultural land or individual houses on private land is generally prohibited for foreigners.
• Apartments, condominiums, and commercial properties are accessible without particular restrictions beyond the minimum price threshold.
• Some states like Johor or Penang have stricter rules and may limit purchases to specific areas.

The Legal Framework: What to Know Before Investing

The real estate purchasing process in Malaysia is governed by several laws and regulations, the main ones being:

• The National Land Code governing land transactions
• The Strata Titles Act for condominiums
• The Housing Development Act protecting buyers

Before any purchase, it is highly recommended to hire a local specialized lawyer who can guide you through the process and verify the transaction’s compliance.

Real Estate Taxation for Foreign Buyers

Purchasing property in Malaysia involves several taxes and fees to consider in your budget:

• Stamp duty: from 1% to 4% depending on the property value
• Legal fees: approximately 1% of the purchase price
• Annual property tax: varies by municipality, generally between 0.1% and 0.5% of the estimated value
• Capital gains tax: 30% if the property is sold within 5 years, 5% beyond that

Rental income is taxed at a fixed rate of 24% for non-residents. However, deductions are possible for expenses and depreciation.

Key Steps in the Purchasing Process

1. Property search and negotiation: Work with a licensed real estate agent who knows the local market well.

2. Signing a purchase offer: A deposit of 2% to 3% is typically paid at this stage.

3. Due diligence: Your lawyer will verify all legal and administrative aspects of the property.

4. Authorization request: For properties exceeding the minimum threshold, approval from the Foreign Investment Committee is required.

5. Signing the sales contract: An additional deposit bringing the total to 10% of the price is paid.

6. Finalizing financing: If you’re using a local bank loan.

7. Property transfer: Registration with authorities and payment of the balance.

Essential Documents to Complete Your Purchase

To successfully complete your acquisition, you’ll need to provide:

• Valid passport and visa
• Proof of income and assets
• Bank statements from the last 3 months
• Recommendation letter from your bank
• Employment contract or documents proving your professional activity

If you opt for local financing, additional documents will be required by the Malaysian bank.

Purchasing property in Malaysia can represent an excellent investment opportunity for foreigners. With its modern infrastructure, pleasant living environment, and dynamic real estate market, the country is attracting more and more international buyers. However, it’s crucial to thoroughly research local specifics and work with competent professionals to successfully complete your project with peace of mind.