Buying Property in Malaysia: A Guide for Foreign Buyers and MM2H Participants
Malaysia remains an attractive destination for foreign property buyers, whether they are relocating, retiring under the Malaysia My Second Home programme, purchasing a holiday home, or seeking a long-term investment.
Foreigners are permitted to own many types of residential and commercial property in Malaysia. However, property ownership is regulated at state level, which means minimum purchase prices, approval requirements and restrictions can differ according to the state, location and type of property.
As a general rule, foreign buyers should expect to obtain State Authority approval. They are normally unable to purchase low-cost or low-medium-cost housing, properties reserved for Bumiputera buyers, Malay Reserve land, or properties below the applicable foreign ownership threshold. The federal guideline generally uses RM1 million as a reference point, but individual states may impose different thresholds. Buyers should confirm the position with an independent Malaysian property lawyer before paying a non-refundable booking fee.
Types of Property
Condominiums and Apartments
Strata-titled condominiums are generally the most accessible option for foreign buyers. They often provide security, shared facilities and professional building management. (Strata-titled property is the term used in Malaysia where an individual owns a specific unit within a larger development while sharing responsibility for common areas and facilities with the other owners).
Before purchasing, buyers should review the monthly maintenance charges, sinking fund contributions, building accounts, occupancy rate, outstanding defects and any restrictions on leasing or short-term accommodation.
Serviced Apartments, SOHO and Commercial-Titled Residences
Some developments marketed for residential occupation are legally held under commercial rather than residential titles. Commercial-titled properties may have different utility tariffs, assessment charges, financing terms and permitted uses. Buyers should confirm the title, approved use and building rules rather than relying only on the developer’s marketing description.
Landed Homes
Terraced houses, semi-detached homes and bungalows may provide more space and privacy, but foreign ownership can be more restricted. Minimum purchase thresholds may be higher, and certain landed properties may be reserved for Malaysian or Bumiputera buyers. In Malaysia “bungalow” refers to any standalone residential property
Freehold and Leasehold Property
Freehold ownership does not normally have a fixed expiry date, although it remains subject to Malaysian law and planning controls.
Leasehold property is held for a specified period, commonly 99 years from the original title date. Buyers should check the remaining lease rather than assuming that a resale property comes with a new 99-year term. A short remaining lease can affect financing, resale value and the cost of extending the lease.
New Developments and Existing Properties
New developments are usually sold before completion. A new development may offer modern facilities, staged payments and developer incentives. However, buyers should assess the developer’s track record, completion risk and the amount of competing supply.
Secondary market property allows the buyer to inspect the completed unit and surrounding neighbourhood. It may also provide clearer information about actual rental demand, maintenance standards and building management.
Taxes and Other Buying Costs
Foreign buyers should expect to pay out more than the advertised purchase price. The final costs will probably include transfer stamp duty, legal fees, financing expenses, valuation charges, State Authority consent fees, registration expenses and ongoing property charges.
Transfer Stamp Duty
From 1 January 2026, the stamp duty imposed on instruments transferring residential property to non-citizen individuals, excluding Malaysian permanent residents, and foreign companies increased to a fixed rate of 8%.
This is now one of the largest upfront expenses for a foreign residential buyer.
For example, an 8% transfer duty on a residential property assessed at RM1 million would amount to RM80,000.
Legal Fees
Legal fees for a standard sale and transfer are regulated under Malaysia’s Solicitors’ Remuneration Order. The principal scale is:
· 1.25% on the first RM500,000
· 1% on the following amount up to RM7.5 million
· For amounts above RM7.5 million, the fee is negotiable, subject to the permitted limit
Separate legal fees normally apply to financing documentation. Developer sales governed by prescribed housing legislation may use a reduced scale. Searches, registration charges, consent applications, taxes and other disbursements are additional.
Using the standard scale, the principal sale and purchase legal fee on a RM1 million property would be approximately RM11,250 before any permitted discount, tax or disbursements.
Together with the RM80,000 transfer duty, the buyer would already face approximately RM91,250 in these two costs alone.
Other Possible Buying Costs
Depending on the transaction, buyers should also allow for:
· State Authority consent and processing charges
· Property valuation fees
· Land and company searches
· Registration and title charges
· Loan documentation and financing costs
· Stamp duty on financing documents
· Insurance required by the lender
· Maintenance charges and sinking fund contributions
· Quit rent and local authority assessment
· Repairs, furnishing and renovation
· Utility deposits and connection charges
The buyer’s lawyer should provide an itemised estimate before the sale and purchase agreement is signed.
Property Requirements Under MM2H
The current federal Malaysia My Second Home programme contains a compulsory property purchase requirement.
The principal categories are:
| MM2H category | Fixed Deposit | Minimum property value | Pass period |
|---|---|---|---|
| Silver | USD150,000 | RM600,000 | 5 years |
| Gold | USD500,000 | RM1 million | 15 years |
| Platinum | USD1 million | RM2 million | 20 years |
| SEZ/SFZ | USD65,000 for applicants aged 21–49, or USD32,000 for applicants aged 50 and above | Subject to the approved development and Johor rules | 10 years |
The Special Economic Zone and Special Financial Zone category currently requires the participant to purchase a property in Forest City, Johor, at a price meeting the applicable Johor minimum, which is around RM500,000.
MM2H applications must be submitted through a licensed MM2H operator. Participants are required to purchase and own a qualifying residence after receiving approval. Up to 50% of the fixed deposit may subsequently be withdrawn for approved purposes, including the property purchase, subject to the programme’s procedures.
The MM2H minimum property price and the state’s foreign ownership threshold are separate requirements. A property may satisfy the MM2H category minimum but still fail to satisfy the rules imposed by the state in which it is located. In practice, the higher applicable requirement will determine what the participant can purchase.
Property Investment Outlook
Malaysia’s property market is better described as stable and selective than as a market experiencing rapid speculative growth.
During the first quarter of 2026, Malaysia recorded 89,966 property transactions worth just over RM51 billion. Transaction volume was 8% lower than a year earlier, while transaction value declined by only 0.6%. The Malaysian House Price Index increased by 1.7%, with the national average house price reaching just over RM500,000.
There is, however, still considerable unsold supply. More than 32,000 completed residential units, worth approximately RM16 billion, remained unsold in mid 2026. A further 19,000 completed serviced apartments, worth RM16 billion, were also unsold. This means buyers should be cautious about projects promoted primarily on the promise of rapid capital appreciation.
For most foreign buyers, the stronger opportunities are likely to be properties that offer:
· A proven local or expatriate rental market
· Convenient access to employment centres
· Proximity to public transport, international schools and healthcare
· Established shops, restaurants and community facilities
· Sensible maintenance charges and sound building management
· A completed or clearly progressing development
· A purchase price supported by comparable transactions
The government expects the market to remain resilient, although growth may be slower and increasingly concentrated around established economic centres and transport infrastructure.
Where to Invest in Malaysia
Kuala Lumpur
Kuala Lumpur generally offers the country’s deepest rental and resale market. It is particularly suitable for buyers seeking professional or expatriate tenants, good public transport and access to major commercial centres.
Popular areas include central Kuala Lumpur, Mont Kiara, Bangsar, Damansara and locations near established MRT and LRT stations. Buyers should compare the property with competing developments nearby, as certain parts of the city have a substantial supply of condominiums and serviced apartments.
Greater Kuala Lumpur and Selangor
Petaling Jaya, Subang Jaya, Shah Alam, Ara Damansara and other parts of the Klang Valley may offer larger properties and more family-orientated neighbourhoods than central Kuala Lumpur.
Demand is supported by employment centres, universities, international schools, hospitals and mature residential communities. However, traffic conditions, public transport access and the amount of competing supply can vary considerably between developments.
Johor Bahru and Iskandar Malaysia
Johor offers long-term potential because of its close economic relationship with Singapore, continuing infrastructure development and substantial investment activity.
Johor was among Malaysia’s leading destinations for approved investment during the first quarter of 2026. Nevertheless, the market contains a large number of completed and planned high-rise units. Buyers should favour established neighbourhoods, developments with genuine occupancy and locations benefiting from employment or transport demand rather than relying solely on future infrastructure announcements.
Penang
Penang appeals to both lifestyle buyers and investors because of its established expatriate community, industrial economy, medical facilities, food culture and international connectivity.
George Town, Tanjung Tokong, Tanjung Bungah and areas serving the Bayan Lepas employment corridor are commonly considered by foreign buyers. Land availability is more limited than in many other parts of Malaysia, but purchase thresholds and foreign ownership restrictions must still be checked carefully.
Kota Kinabalu, Kuching and Langkawi
These locations may suit buyers who place lifestyle, retirement or holiday use ahead of maximum liquidity.
Properties in smaller or tourism-dependent markets can take longer to rent or resell. Investors should consider seasonal demand, flight connectivity, management arrangements and the comparatively limited number of future buyers.
Recent approved investment has been concentrated in Selangor, Johor, Kuala Lumpur and Penang. This may support employment-led housing demand over the longer term, although approved investment figures do not guarantee rental returns or property price growth.
Can an MM2H Property Be Sold?
Under the current programme guidelines, the property purchased to meet the MM2H requirement generally cannot be sold for 10 years.
An exception is only possible if the participant sells the property in order to purchase another Malaysian residence of a higher value; or surrenders the MM2H visa. Approval and programme compliance should be confirmed before entering into any sale.
This restriction is an MM2H programme condition. It is separate from the taxes that may be payable when the property is eventually sold.
Taxes and Costs When Selling Property
Real Property Gains Tax
Real Property Gains Tax, commonly known as RPGT, is charged on the taxable gain arising from the disposal of Malaysian real property. It is not normally calculated on the entire selling price.
For an individual who is neither a Malaysian citizen nor a Malaysian permanent resident, the current rates are:
· 30% when the property is sold within the first five years
· 10% when the property is sold in the sixth year or later
The tax is applied to the chargeable gain after permitted acquisition and disposal costs are taken into account.
An MM2H participant who sells a qualifying property after the programme’s 10-year restriction has expired may therefore still face RPGT at 10% on the chargeable gain, unless a specific exemption or different tax treatment applies.
Both the buyer and seller have RPGT filing obligations. The relevant forms are generally required within 60 days of the disposal, and electronic CKHT filing has been compulsory since 1 January 2025.
For disposals involving a non-citizen or non-permanent-resident seller, the purchaser’s lawyer may also be required to retain and remit part of the purchase consideration to the tax authority. Under the applicable Part III rules, the retention can be up to 7%, subject to the statutory calculation.
Other Selling Costs
A seller may also need to budget for:
· Estate agency commission
· Legal fees for the sale and loan redemption
· Early financing settlement charges, where applicable
· State consent or assignment expenses
· Outstanding maintenance and sinking fund charges
· Quit rent and assessment arrears
· Repairs required under the sale agreement
· The settlement of utility and management accounts
Before You Buy
Prospective buyers should complete several checks before committing themselves:
1. Confirm that a foreign purchaser is permitted to acquire the property.
2. Check the state’s current minimum purchase price and consent requirements.
3. Appoint an independent property lawyer rather than relying entirely on the seller or agent.
4. Conduct title, bankruptcy, company and land searches where applicable.
5. Review the strata management accounts, maintenance arrears and sinking fund.
6. Inspect the property and obtain a professional survey or defect inspection.
7. Compare asking prices with actual transactions in the same development.
8. Calculate the likely net rental return after maintenance, vacancy, management fees and tax.
9. Obtain financing approval before signing an unconditional agreement.
10. For MM2H purchases, confirm that the property satisfies both programme and state requirements.
Property can be an important part of establishing a home or long-term connection with Malaysia. Nevertheless, buyers should treat guaranteed returns, unusually high rental projections and promises of rapid resale with caution. A well-located property purchased at a sensible price for a clear purpose is generally a safer proposition than one acquired solely because of promotional incentives.
This guide is provided for general information and reflects the rules available in July 2026. Property thresholds, MM2H requirements and tax rules may change. Buyers should obtain independent legal, tax and financial advice before entering into a transaction.