There are various crucial considerations to make if you’re thinking about buying real estate in Penang, Malaysia, as a foreigner. Penang island offers alluring prospects for real estate ownership and is a well-liked vacation spot for visitors, particularly retirees.

1. The reduced minimum purchase price is one benefit of using the MM2H visa to buy real estate in Penang.

Non-MM2H foreigners, such as those with work or tourism visas, must purchase landed properties (such as terraces, semi-detached houses, bungalows, heritage properties, or lands) or stratified properties (such as apartments or condominiums) valued at more than MYR 3 million per unit or lot. For non-MM2H foreigners interested in buying unsold overhang residential properties from developers, the minimum acquisition requirement is MYR 1.8 million for overhang landed properties and MYR 800,000 for overhang residential stratified properties. Guidelines for MM2H Visa Holders Purchasing Residential Real Estate:

2. Current holders of MM2H visas are permitted to buy a maximum of two residential properties.

Permitted to buy a maximum of two residential homes.

Every property needs to be worth at least RM500,000.

As long as they have a residential title, the properties can be homes, bungalows, gated communities, or condominiums.

The same regulations that apply to foreign buyers apply to the third property.

Requirements for Purchasing Real Estate Following the Approval of the Most Recent 3-Tier MM2H Application:

Platinum Category: A property must be worth at least RM2 million.

Gold Category: A property must be worth at least RM1 million.

Silver Category: A property must be worth at least RM600,000.

Participants of MM2H in Special Financial Zones (SFZ) and Special Economic Zones (SEZ): It is necessary to buy residential houses straight from developers rather than real estate brokers or previous owners. The State Authority has the final say over the minimum purchase price and may need to approve or consent to it.

Only properties in Peninsula Malaysia are available for purchase.

There is a 10-year lock-in term, which means that properties cannot be sold during this time. Nonetheless, it is permitted to buy properties that are more valuable than the ones that are currently there.

Note: The MM2H visa will be revoked for failure to comply with these regulations.

It’s crucial to remember that land is under state sovereignty, and Penang island is especially covered by these regulations. It’s best to enquire about specific rules with the relevant real estate agent or solicitor if you’re interested in buying property in other parts of Malaysia.

Qualified buyers might also look into mortgage options for financing their properties. It is advised to contact the banks directly for further information as they may have their own mortgage criteria and loan margins, and some may demand the MM2H visa as a prerequisite.

The kind of property you can purchase is unrestricted, however buying agricultural land can need more paperwork, explanation, and approval. In George Town, a lot of foreigners choose to purchase homes, condominiums, and historical heritage homes. Property ownership in Malaysia is simple, in contrast to many other nations in the region. There is no need for convoluted buying arrangements involving corporations and proxies because the properties are freehold, meaning you own them completely.

You have the same rights as a local as a property owner, and your name will appear on the title. Malaysia ensures that all transactions are carried out lawfully by adhering to the British legal system. It is advised that you hire a lawyer to represent your interests and help you navigate the process in order to guarantee a seamless outcome.

The northern portion of Penang, which includes Batu Ferringhi, Tanjung Tokong, Tanjung Bungah, and Gurney Drive, is a popular destination for foreign visitors. A variety of events, clubs, retail malls, and activities are available in these places. Because of its lively atmosphere and charming historical character, some people might also decide to stay at the George Town UNESCO World Heritage Site. The southern portion of the island, which is nearer the Penang Bridge, Penang International Airport, and Queensbay Mall, may be preferred by some.

There are several options and advantages to buying real estate in Penang as a foreigner, particularly when using the MM2H visa. Penang’s real estate market offers choices to fit various needs, whether you’re searching for a vacation home, a retirement home, or an investment property. You can make an informed choice and take advantage of the advantages of property ownership in this energetic Malaysian metropolis with the correct legal advice and careful investigation.

Advice for Buying Real Estate in Malaysia.

To assist you in navigating the process of buying a property in Malaysia’s secondary market, this manual offers a step-by-step instruction. Properties that have previously been owned are referred to as secondary market (sub-sale) properties, and they are typically found in established residential communities in mature locations.

1. Choosing a Real Estate Agent: It is best to work with a trustworthy real estate agent to begin your home search. A competent agent can help you locate properties that fit your needs and price range.
2. Viewing Properties: After you hire an agent, they will set up showings for you to see properties. To make sure the agent shows you houses that fit your needs, it is crucial to let them know your precise criteria, including your budget and the size of the property.
3. Bargaining: Negotiating the price and other details of the transaction with the seller comes next after choosing a property. This negotiating procedure will be greatly aided by your agent.

4. Selecting a Real Estate Agent: When starting your property hunt, it is best to collaborate with a reliable real estate agent. You can find properties that meet your goals and budget with the assistance of a knowledgeable agent.
5. Viewing Properties: An agent will arrange for you to view properties when you employ them. Telling the agent your exact requirements, such as your budget and the size of the property, is essential to ensuring that they show you homes that meet your demands. Negotiation: After selecting a property, the following step is to negotiate the price and other aspects of the deal with the seller. Your agent is going to be a huge help during this negotiation process.
6. Paying the 10% Down Payment: After subtracting the earnest deposit, the buyer must pay a 10% down payment upon signing the SPA. The lawyer is the recipient of this cash.
7. Getting the Required Consents: Depending on the situation, specific consents can be needed:  (a) State consent: State consent can be required if the buyer is a foreign national;  (b) Developer consent: This may be necessary if the property is subject to a master title;  (c) Land office consent: This may be required if the property is leasehold and the strata title has not yet been issued. 
8. 90% Balance Payment: Within 90 days of receiving all required approvals, the buyer is required to pay the remaining 90% of the purchase price. The buyer may have to make their own payments before the bank releases the loan money if they are using a bank loan.
9. Resolving Outgoing Payments: The buyer and seller must make a number of payments, which your attorney will help you with. These payments may include: (a) Sinking fund and maintenance fee;

(b) insurance against fire;

(c) Quit rent and assessment charge;

(d) Bills for utilities;

(e) If the property is rented, the security deposit and rental fee.

10. Key Handover (Vacant Possession): In accordance with the SPA, the seller must turn over all of the keys within three to five days of the last payment being received. Using the supplied inventory list as a guide, the buyer should check the property.

In conclusion, rigorous preparation and close attention to detail are necessary when buying secondary market real estate in Malaysia. You can move through the process with greater assurance if you follow the instructions in this guidebook. Don’t forget to choose a trustworthy lawyer and real estate agent to help you with the deal. Protect your interests as a property buyer by carrying out extensive due research and making sure that all legal criteria are met.

Deposits and the Property Rental Process: 

Usually, a viewing is the first step in the property rental process. Your agent will help you negotiate with the landlord after you’ve chosen a property. A one-month earnest deposit, which is equal to the first month’s rent, is needed when a verbal agreement is reached.   The designated attorney or agent then prepares the Tenancy Agreement (TA) (with an accompanying admin fee). You will sign the TA first as the tenant and pay the entire amount due, which includes the security deposit (usually two months’ rent), the utilities deposit (usually half to one month’s rent), and any necessary access card deposit. Following the landlord’s signature, the TA will be finalised by being stamped.

Professional Fee for Property Purchase and Rental: 

One month’s rent plus SST is the professional fee for renting a property, while 1% + SST is the fee for buying one.

Legal fees, levy, state consent fees, stamp duty fees (for purchase), and legal and administrative fees in addition to stamping fees (for leasing) are additional fees that you could have to pay.

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