Buying Malaysian Properties: A Hassle-Free Process | Malaysia property news and resources

Buying Malaysian Properties: A Hassle-Free Process | Malaysia property news and resources

Buying Malaysian Properties: A Hassle-Free Process For foreigners intending to buy a home, Malaysia remains one of the most friendly and hassle-free nations in the region when it comes to acquiring propertiesPosted Date: Dec 20, 2012 By: As a nation, we have introduced policies that are friendly towards foreign property investors in Malaysia, especially so with the Malaysia My Second Home scheme, which comes with plenty of benefits for non-Malaysians buying homes here. At the same time, Malaysia is also perhaps one of the most flexible countries when it comes to legal issues relating to the buying of properties by foreigners in the region. Foreigners can buy any type of properties here, be it condominium, bungalow or even land, as long as it is priced above RM500,000. The buyer can buy both residential and commercial property in his or her name, or under a company. A non-Malaysian buyer must also obtain the state authority’s consent before a property can be transferred; this usually takes anywhere from six weeks to six months (in Kuala Lumpur, this typically takes one to two months). Apart from that, the entire buying process is the same as a local buyer. Interestingly, if the foreign buyer is not residing in Malaysia, he or she can sign the sale and purchase agreement at the Malaysian High Commission in their country of residence. As for financing, Malaysian banks and foreign banks in Malaysia do provide loans to foreigners. They will typically finance up to 70% or 80% of the property price, and this is quite a bargain compared to other countries. The restrictions are quite minor for non-Malaysians intending to buy a property here. Naturally, they are prohibited from buying properties that are valued less than RM500,000. Non-Malaysians are also prohibited from buying properties built on Malay reserve land, and those allocated to Bumiputera interest. Let us look at the other countries in the region. The following points were shared by Chris Tan, managing partner of Chur Associates, during a session on ‘How to Sell Malaysian Real Estate Internationally’. Singapore In Singapore, Tan noted, non-Singaporean property buyers are only allowed to buy limited types of flats and condominiums without the need for approval. However, there are two important criteria for assessment: •    Must be a PR of Singapore •    Contribute financially to Singapore Unfortunately, most of the properties are categorised under restricted residential property, thus foreign buyers must obtain approval for purchasing these properties. What are the restricted residential properties? They include: •    Vacant land •    Landed residential property, such as bungalows, terrace houses, semi-detached houses •    Residential property in a building of less than six levels •    A Housing Development Board (HDB) shop-house •    A HDB flat purchased directly from HDB •    A resale HDB flat where HDB has consented to the sale •    Executive Condominium bought under the Executive Condominium Housing Scheme Act, 1996 Indonesia A foreigner cannot own land in Indonesia. Tan said, “However, a foreigner can only acquire the leasehold title to a building – however, the title only lasts for 25 years with an extension of 30 years for a maximum of 55 years and then it reverts back to the original owner.” Alternatively, he added, potential non-Indonesian buyer can set up a 100% foreign own company, but is only allowed to acquire property for only 25 years and is subject to renewal. China Tan noted that China is set to tighten restrictions on foreign real estate investment, according to a statement from the Chinese Ministry of Commerce (MOC) early last year. The MOC, according to Tan, has asked local authorities to increase supervision on property investment involving foreigners and strengthen risk controls on the real estate sector. He noted that the statement stipulates that foreign funded developers will not be allowed to make profits through the buying and reselling of real estate projects. Tan also pointed out that the laws and procedures in China and for each state are neither simple nor transparent. India The Indian law states that non-Indians who reside outside of India cannot purchase property. A foreigner who is a resident in India may purchase property, but must obtain the approvals and fulfil the requirements, if any, as prescribed by the local authorities. South Korea Language is an issue in South Korea. For foreigners who do not have a comprehensive understanding of the Korean language, activities involving the purchase and sale of significant assets will be a challenge. Another issue concerns the remittance of revenue or profit from a property in Korea, which is not allowed unless the property is acquired through a stock company. Thailand The country prohibits foreigners from owning freehold property. Tan noted that the procedures are complicated and added that apartments can be purchased by foreigners as long as at least 51% of the building is owned by Thais. Summary In short, Tan sums up with the points that makes Malaysia a great place for non-Malaysians to set up their second home or find a property to invest: •    Direct ownership •    Able to own freehold property •    Established commonwealth legal system •    Constitutional property ownership right •    Established banking system to fund foreign acquisition •    Workable purchase procedures •    Statutory protection for homebuyer