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What are some of the advantages of buying a property in Malaysia for the investors?

Malaysia has become a hot spot for real estate investment in Southeast Asia due to the surge of investment in the Southeast Asia region. However, most people are still not sure of the conditions required to buy a house in Malaysia. Some investors are not even aware of the advantages of buying a house in Malaysia. Let us look deeper into it below.

Malaysia’s House Purchase Policy

It is legally stipulated that foreigners can purchase almost all types of properties in Malaysia, such as detached houses, flats, apartments, landed properties, suites, commercial properties, industrial real estate, agricultural land (non-Malays) and industrial land (non-Malays) etc., except for the following:

  1. A property with a price below RM1 million;
  2. Low-cost residential units designated by the state governments;
  3. Properties built on reserved lands in Malaysia;
  4. A developing property designated by the government as an indigenous unit.

The threshold for foreigners to purchase a property is different. Therefore, the minimum property sales price will vary from state to state. Unlike other countries, Malaysia allows foreign investors to register their purchases property under their own name. This regulation does not only offer flexibility and convenience but also fully protects the rights of foreign investors. As long as the house purchased is used as own residence, banks in Malaysia will also provide the convenience of loans.

Moreover, there is no limit for foreigners to buy properties in Malaysia. Foreigners can buy any number of properties in Malaysia and choose to live in, rent or sell them.

The Advantages of Investing in Malaysian Properties

Firstly, Malaysia has the world’s most endurable climate. The climate in Malaysia is tropical where it is warm all year round with no huge temperature differences and obvious four seasons. Malaysia has a temperate climate with no natural disasters such as earthquakes, tsunamis and typhoons. The tourism and medical sectors along with old-age welfare are highly advanced. Furthermore, with the increasing population, the demand for housing in Malaysia is on the rise thus increasing the housing prices and rental too.

Besides, most of the properties in Malaysia are known to have either permanent property rights or the 99-year property rights. As there is no tax on property inheritance in Malaysia, investors can pass the property to future generations.

Houses in Malaysia are priced fairly low, ranked at 99th in the world but the rental yield is high, ranked 6th in the world. The average price of properties in the city centre of Kuala Lumpur is 2,616 USD/m2, ranked lower than most Asian cities but as seen from the second quarter of 2012 to the second quarter of 2017, house prices have risen by 43.8% and the return rate for rentals can reach 6.21%.

Requirements to Apply for Property Mortgage

  1. Information on personal loan;
  2. A scanned copy of the passport photo page;
  3. Proof of employment (in-service certificate, income tax bill, tax payment and tax refund certificate for the past year, salary list for the last 3 months, if the occupation is of a business nature, you need to provide a 6-month salary list.);
  4. Proof of financial resources (sales cover and internal pages of the payroll deposits, proof of deposit balance in English, other sources of income, such as the payroll passbook and the deposit balance, you may not need to apply for the English version of the deposit balance);
  5. Company information (company registration certificate, company financial report for the past year, the company's bank deposit cover and internal pages for the past 6 months, the company's English version of the deposit balance certificate, the company's income tax bill and tax refund certificate for the past year. If it is a company opened by oneself or as a shareholder, this is a must);
  6. The original or reservation form of the house sale and purchase agreement;
  7. One bill (consistent with the address on the sale and purchase contract);
  8. Each form for bank loans;
  9. Application for approval of the MM2H programme and VISA (if any);
  10. Proof of savings in Malaysia or a financial company (if any);
  11. If married, please attach a copy of your spouse's passport (photo and signature page);
  12. Two business cards (if any).

The Mortgage Application Process

  1. Gather relevant information and documents;
  2. Submit an application form;
  3. The bank reviews for 2-3 weeks;
  4. Notification of approval;
  5. Confirm whether to accept the loan or not within 14 days;
  6. Notify the preparation of the loan contract;
  7. Arrange to sign a contract with the notary office;
  8. Pay the legal fees;
  9. Pay in instalments in accordance with the prescribed procedures;
  10. The sale and purchase agreement must be stamped and then reviewed by the Property Valuation Department;
  11. The transfer must be registered with the Land Registry.

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