A Foreigner's Guide: Buying a Home in Malaysia

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*NOTE* Malaysia’s Property Regulations are Getting Tighter for Foreigners. Here’s a Suggestion

Are you a non-Malaysian looking to invest or purchase a residential property for your own stay in Malaysia?  In this quick guide, we unveil the conditions, restrictions and qualifications you’ll need to comply with as well as the key benefits you’ll enjoy when you purchase a home right here in Malaysia.


The Definition of “Foreigner” in Malaysia

First off, let’s establish what constitutes as a foreigner in Malaysia.  According to the EPU, or Economic Planning Unit of the Prime Minister’s Department of Malaysia (which provides guidelines on purchase of Malaysian properties by foreigners), “foreign interest” in Malaysia means any interest, associated group of interests or parties acting in concern which comprises:

(1)An individual who is not a Malaysian citizen;
(2)An individual who is a Permanent Resident in Malaysia;
(3)A foreign company or institution;
(4)A Malaysian company or institution whereby the Parties stated in (1), (2) or (3) hold more than 50% of voting rights.


What are the Criteria for a Foreign Interest to Purchase a Residential Property in Malaysia?

Any foreign interest can purchase residential properties in Malaysia subject to the following criteria:

(1)The property must cost RM1,000,000 and above per unit.
(2)The property cannot be categorized as low or low-medium cost as determined by the State Authority.
(3)The property cannot be built on Malay reserved land.
(4)The property cannot be one which has been allocated for Bumiputra* interest in any property development project as determined by the State Authority.

* Bumiputra refer to any Malay individual or aborigine in Peninsular Malaysia as defined in Article 160(2) of the Federal Constitution of Malaysia; as well as any individual as defined in Article 161A (6)(a) and Article 161A (6)(b) in Sarawak and Sabah respectively.

At present, foreign acquisition of a residential property valued at RM500,000 and above is exempted from approval from the EPU.  However, you will still need to attain approval from the relevant State Authority.  Hence, it is vital that you double-check on the prevailing minimum purchase price as well as other conditions imposed by the State Authority prior to taking any actions, as such conditions tend to change from time to time and are not standardized between the different States of Malaysia.      


To get the latest guidelines on acquisition of properties direct from the EPU, click here.


For a Foreign Interest, What are the Standard Financing Approaches in Malaysia?

There are generally two ways to finance the purchase of properties in Malaysia.

The first, is to bring in your own money from your home country to finance the purchase.  This is the most direct approach and the easiest, as non-Malaysians are allowed to maintain accounts with banks in Malaysia without restriction on the amount of Ringgit held in the accounts.

The second, is to take a loan with a bank in Malaysia.  With sound credit ratings, most foreign interests should have no problem obtaining Margin of Financing of seventy percent (70%) with banks in Malaysia.  This could be even higher depending on the banks and financial standings of the applicants.     

For those seeking to purchase a residential property in Malaysia by taking up a home loan, you are advised to make comparisons with the various banks as they may differ slightly from bank to bank.  Some banks such as CIMB and UOB offer categories of home loans specifically catered for foreigners; which make them a great place to start when shopping around for a home loan.  But generally, most banks in Malaysia are eager to provide home loans for foreigners so finding one should be relatively simple.

Buying a Residential Property under the Malaysia My Second Home Programme (MM2H)

MM2H is a programme promoted by the Malaysian Government to allow foreigners fulfilling certain criteria to reside and travel to and from Malaysia unrestricted for an extended period of time.  Generally, MM2H is effective for a period of ten (10) years, and is renewable.

For those staying in Malaysia using MM2H, buying a property in Malaysia is an added incentive; as it allows you to withdraw part of the money you need to place in a fixed deposit account in Malaysia  (i.e. an MM2H requirement).  You can do this starting from the second year of stay in Malaysia:

  • For MM2H participant below the age of 50, you can withdraw up to RM150,000 from your fixed deposit commitment of RM300,000 for approved expenses, including those related to home purchase.
  • For MM2H participant aged 50 and above, you can withdraw up to RM50,000 from your fixed deposit commitment of RM150,000 (i.e. if you applied for MM2H using such means) for approved expenses, including those related to home purchase.

    Additionally, should you purchase a property in Malaysia worth RM1 million and above in Malaysia, you are allowed to reduce the amount of money you need to place in the aforementioned fixed deposit account, in the following manner:

  • For MM2H participant below the age of 50, your fixed deposit commitment is reduced from RM300,000 to RM150,000.
  • For MM2H participant aged 50 and above, your fixed deposit commitment is reduced from RM150,000 (i.e. if you applied for MM2H using such means) to RM100,000.

    Needless to say, purchasing a property is highly recommended if you intend or are already an MM2H participant.  To find out more about MM2H here.

Finally… A Quick Note on Why Non-Malaysians Are Buying Properties in Malaysia

In recent years, more and more foreigners are buying properties in Malaysia.  The lower cost-of-living compared to other Asian territories (such as Hong Kong and Singapore) aside; Malaysia’s relatively soft stance on Real Property Gain Tax (“RPGT”) is a further financial incentive for overseas investors.

At present, the Malaysian Government imposes an RPGT of fifteen percent (15%) on property disposal gain for properties sold within the first two years, and an RPGT of ten percent (10%) on property disposal gain for properties sold within 3 – 5 years.  Properties sold after five years are not subjected to RPGT at all.


An important thing about RPGT is that it is the same for both Malaysians and non-Malaysians. This is one of the key benefits for a foreigner purchasing a home in Malaysia, as you are entitled to the same returns just like any other Malaysians!

This article is brought to you by, a price comparison website dedicated to helping Malaysians make the best use of their money. They can be contacted at [email protected].


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