20 Taman Desa Seputeh homeowners rejoice over freehold titles
Twenty residents from Taman Desa Seputeh, Kuala Lumpur, are rejoicing after successfully converting the leasehold titles
For Foreigners Buy a property in Malaysia
Malaysian Property Titles
There are two categories of titles in Malaysia available for foreigners. Freehold (which gives the owner full, permanent ownership of the property) and leasehold (which allows the owner to stay in possession for a limited period). Most leaseholds titles are originally for 99 years and can be extended on paying a further sum.
Sale & Purchase Agreement in Malaysia
The purchase agreement for a property is called the "Sale & Purchase Agreement" (SPA or S&P). These are fairly standard, but it is best to have a lawyer representing your interests before signing any agreements.
Malaysian Property Purchase Approvals
For most property purchases, foreigners are no longer required to obtain Foreign Investment Committee (FIC) approval. Foreign purchasers are still required to obtain approval from the State Authorities who will consider factors such as the location of the property, the type of property and in new developments, the percentage of total units sold owned by foreigners. State consent can often take six months and in some cases longer.
Legal Fees for Malaysian
Property Transactions
Value of property
Rate
1st RM 150,000
1%
Next RM 850, 000
0.70%
Next RM 2,000,000
0.60%
Next RM 2,000,000
0.50%
Next RM 2,000,000
0.40%
Over RM 7,500,000
(negotiable)
>0.40%
Stamp Duty
Value
Rate
Up to RM 100,000
1%
RM 100,001 - RM 500,000
2%
RM 500,001 upwards
3%
Property Gains Tax in Malaysia
Property Gains Tax in Malaysia will effect from 1 January 2014, the Malaysian government will raise the minimum price of property that can be purchased by foreigners to RM1 million.
Also, the real property gains tax (RPGT) rate has been increased to 30% for citizens who sell their units before three years. For disposals within the holding period of up to four and five years, the rates are increased to 20% and 15% respectively. For disposals made in the sixth year and subsequently, no RPGT will be imposed on citizens, but companies will be taxed at 5%.
For foreign buyers, the imposed RPGT is at 30% on the gains from properties disposed within the holding period of up to five years, and for disposals in the sixth year and subsequently, a 5% RPGT is imposed.
