Buying Real Estate in Malaysia
Malaysia is an easier country for foreigners to purchase real estate than many other of Asian countries. There are a few restrictions on foreigners, but they are not extremely hindering.
Attorneys and Real Estate Agents
In most cases, buyers will end up working with a real estate agent. The seller is the one who ends up paying this party.
It is recommended to appoint a real estate attorney, in order to properly surpass the legal restrictions in Malaysia. They will make sure that everything goes correctly in your best interest.
Rules, Regulations and Restrictions
There are a few restrictions on the foreign ownership of property.
Foreigners can purchase property that is only over a certain value, and can only own up to two pieces of residential real estate. Condominiums are only allowed to be occupied up to 50% foreigners within one block. If you seek to buy a third property, you must get approval from Foreign Investment Committee of the Economic Planning Unit at the Prime Minister’s Department, and provide a valid reason why you wish to obtain another property. Foreigners are not allowed to own land on Malay reserve land. Other than these rules, foreigners have the same rights as natives in the real estate process.
General Process
Once you settle on a property, you should make an offer to the seller. If this offer is accepted, then you should draft a Letter of Acceptance, and both of you should sign it. You must then put down a deposit of 3% of the total purchase price. Within two weeks, you are required to put down an additional 7% deposit. Be aware that these deposits are non-refundable, so you are bound to your prospective property and cannot pull out. You should probably have the property surveyed before you decide to sign the initial document and put down the deposit. You should also put a clause in the Letter of Acceptance that if the seller pulls out of the agreement, then you would get your deposit back.
The final contract is the Sale and Purchase Agreement. You and the seller must sign this document at a Stamp Office. The property should then be examined by the valuation department. After this, then you must pay the Stamp Duty (1-3% of the final purchase cost) to the Stamp Office. You must have the signed Sale and Purchase Agreement forwarded to the land registry, and they will have the property transferred into your name.