Malaysia Property Buyer Guide


It is vital to take note of certain criteria before purchasing a property. Buying a property takes up an extensive time, planning, money, patience and sometimes lady luck is involved as well. Therefore, it should be decided wisely before making a decision.

Location: This is the most important aspect when you shop for a house. A shorter distance from home to your office will save you valuable time. Living away from the city is a good idea if one prefers a peaceful and serene surrounding and basically it will cost you less.

Price: Before buying a house, you should plan out and assess your budget and financial capability to avoid failure in making the mortgage payments. The following are the most important things to look out for:

  • Down payment: 10 to 20 percent of the house
  • Monthly repayment: 33 percent of your monthly income.
  • Other costs: Lawyer fees, government duties, transfer of ownership, renovation/repairs, maintenance fees for condo living, etc.

Neighbourhood: Always look for a surrounding that you feel most comfortable and convenient to live in. Find out about the available shopping places, schools, clinics, cafeterias and others. However, illegal activities such as rubbish dumping, illegal workshops and squatters may somehow devalue your property.


The main criteria for Renting & Buying a property are as follows:





Property found  1) 

Pay earnest deposit of 2% of purchase price for confirmation (Signing an option to purchase)


Pay one month deposit  2) 

Pay 8% of purchase price 14 days later (Signing of Sale and Purchase Agreement)


           3) 7 days from confirmation signing of tenancy agreement (Pay additional 2 months rental and utility deposit)  3)  

Pay 90% of purchase price within 3 months after signing of Sale and Purchase Agreement (Take possession of property)


Stamping of tenancy agreement    


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Malaysia is a popular country for foreign visitors. In 2011 Malaysia is ranked 6th in the world in number of tourist arrivals. It is also fast becoming a favorite place in Asia for foreigners to buy property because of its openness to foreign buyers and strong property laws that protect homebuyers and investors.
Buying a property is easy and very safe as long as you use the services of a reputable property agent and lawyer. Buyers should be aware that the recent popularity of Malaysian property has encouraged the growth of opportunist property companies, giving the appearance of reputation and quality. So check the credentials of your agent, the developer and property before you buy.


The Malaysian legal system is based on English Law. Documents and contracts are usually written in English.

Unlike some of its Asian neighbors, Malaysia has very clear and consistent laws on property ownership. Malaysia uses the Torrens System of land law adopted originally from Australia and New Zealand that requires all ownership of property to be registered. Once the title is registered it is secure and cannot be disputed or challenged by anyone. This gives investors a high degree of security and peace of mind.


Malaysia has historically made it a national priority to provide housing to its citizens. As a result, a high percentage of Malaysian people own their own home and many young people save hard to buy a house to raise a family.

As Malaysia grew richer it began to relax its policy on foreign ownership of property. In 2006, Malaysia removed all restrictions on house buying by foreigners. Today foreigners can buy any number and type of property in the country as long as the property price exceeds Ringgit 500,000.

Malaysia has immigration policies that can give foreign buyers residency rights in Malaysia.


Appointing a property agent to be your representative can be invaluable when buying a property in Malaysia. Choose an agent who is competent, experienced and from a licensed agency. Stay with one agent per transaction and be frank with your agent as to the kind of property you are looking for, such as size, location and price. Build a relation with your agent who can act as your consultant and introduce to you other professionals such as lawyers and bankers to give you legal and financial advice.


As a foreigner you are freely allowed to buy any kind of property in Malaysia: whether apartment, house with land, office or shop. You can either buy a completed older unit from an existing owner (“sub-sale property”) or new or soon to be built property from a property developer (“project property ”).

In a project property, other than price, location and design, the following are also important:

a) stage of completion of building and handover date
b) condition of title
c) reputation of developer
d) management and maintenance fee
e) availability of bank financing


If you are buying a sub-sale property, you will be required to prepare 2% of the purchase price as earnest deposit and sign an offer to purchase to the seller. The earnest deposit is usually not refundable.

It is possible to ask your agent to make the offer to purchase conditional on bank loan so that if you cannot get financing then the earnest deposit will be refunded back to you but this must be negotiated and carefully drafted into the offer.


Once you have paid the 2% earnest deposit and signed the offer to purchase form you should quickly appoint a lawyer to act for you as you are given only a limited time (normally 14 days) to sign the sale and purchase agreement and pay a further 8% as balance of the deposit.

The sale and purchase agreement is the formal and final contract between the seller and you. Your lawyer has a duty to conduct a search on the property title and negotiate the sale and purchase agreement and explain the terms to you before you sign.

In project property, the buyer and seller (property developer) will sign a sale and purchase agreement that is prepared according to a statutory standard form.

Even so, it is still important for you as the buyer to have your own independent lawyer to act for you and explain all the terms of the contract. Using a lawyer who is also acting for the seller is not wise as it puts you at risk of conflict of interest and is a breach of the lawyer’s own professional ethics.


As a general rule you should allow roughly between 3 to 5 % of the purchase price for various expenses associated with purchasing a property.


Lawyer fees – around 1% of the purchase price

Stamp Duty (according to scale, often this is the largest expense)

For the first RM 100,000, the stamp duty payable is 1% 

For the next RM 400,000, the stamp duty payable is 2%

For any sum exceeding RM 500,000, the stamp duty payable is 3%

Agent Fee – None as agents normally are paid a commission by the Seller 
but if appointed as buyer’s agent then the fee is between 2 to 3 % of the purchase price.


If you are buying the property as an investment and intending to rent out your property, you have two options. You can either manage the property yourself, or you can use a property manager.

Professional managing agents will look after every aspect of your tenancy. Their job includes collecting the rent, maintaining financial records, conducting regular property inspections, handling any disputes and arranging all repairs that need to be done.

Most property managers charge a percentage of the weekly rent as a management fee. This is usually around 7-10%, however this is negotiable.

You should also expect to pay additional one-off fees when they find a new tenant.
Last but not least, please make sure that the managing agent you are interested in using is licensed by the Board of Valuers before you enter into any formal agreement.

Their license will be displayed in their office or on their website.

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