The Property Banks Buyers Guide to Malaysia
Overseas buyers are eligible to buy 2
houses at a cost of not less than RM150,000 each (about £24,000).
For this purpose, they are also entitled to apply for a loan from a
local bank for 60% of the purchase price - sometimes more. There is
no upper Ltd to the cost of properties that may be purchased by
overseas investors in Malaysian property.
The standard procedure for an overseas buyer purchasing a property
is:
1) Sign a letter of offer and pay 3% of purchase price as an earnest
deposit
2) After 14 days, sign a sale and purchase (S&P) agreement; pay 30%
of purchase price
3) Pay the balance of the purchase price according to the terms of
the S&P agreement
Legal fees, stamp duty and local agency fees (if used) are also
payable. You can rent out your property if you are not using it and
we would be happy to assist you in finding a tenant. Many of our
available properties offer guaranteed rental returns for a period of
3 to 10 years. Contact us for details.
Opening a bank account in Malaysia is relatively easy. Once you
purchase a property, we can introduce to you a bank of your choice
so that you can open a local banking account. With internet banking
you can access your account in English at all times from anywhere,
check balances, transfer funds and even pay utilities bills - all
done online through the internet. You can appoint a lawyer of your
choice or, if you prefer, we can recommend to you a local lawyer who
can take care of all the documentation, approvals etc. and even
arrange mortgage financing (if required). High-end residential
property in the affluent Klang Valley in and around Kuala Lumpur
continues to dominate the residential market, but other favoured
areas are Mont Kiara, Damansara Heights, Sunway Damansara, Penang
and Langwaki.
Prices of property vary as ever by quality and popularity of area
but Malaysia offers a very wide spread of pricing bands. A 30%
deposit of the property value is usually required for overseas
purchasers of of-plan investment properties. Average condominium
prices range from less than £40,000 for a studio to £150,000.
Bungalows from £80,000 to £225,000 - depending as usual on location
- and two storey houses (with 5 or 6 bedrooms and 3 or 4 bathrooms)
£200,000 upwards. Currently, base lending rate is 6.5% per annum,
but the mortgage market in Malaysia is reasonably competitive and
fixed rate and other discounted rates are available; loans are
available up to a period of 30 years
Malaysian Housing Ministry Advice
Before you decide to buy a new house or any kind of property, ensure
that the housing developer - if buying "off-plan" - has a licence
and it is still valid and check the housing developer has an
advertisement and sales permit and that it is still valid.
Determine the Property Type
For new landed property such as bungalows, semi-detached houses and
terrace houses, the expected date of completion is 24 months from
the date of signing of the Sales and Purchase Agreement and for new
subdivided building such as condominiums, flats, apartments and
townhouses, the expected date of completion is 36 months. Buyers are
advised to obtain from the housing developer sales literature with
all relevant information about the project such the development's
licence number, and advertisement and sales permit.
Land Status
Buyers need to know whether the land is:
* Freehold land (held in perpetuity)
* Leasehold land (check the number of years left on the lease)
* Malay Reserve land (has restrictions and not suitable for overseas
buyers)
* The status of the land can be checked at the Land Office or the
State Land Registrar.
Important Information
For new or 'off-plan' properties the following information should be
checked:
The Housing Developer's licence number and the expiry date;
The advertisement and sales permit number and the expiry date;
The name and address of:
The licensed housing developer
Authorised agents (if any)
Those holding power of attorney (if any)
The project management company (if any)
Check List
Has the land has been mortgaged to the bank for a loan?
Location description
Building materials specification(s)
Size of building amenities and services
The name of the housing project (if any)
Expected date of completion
Price of each type of house
Number of units for each type
The reference number of the approved plan
The name of the local authority.
First Payment
Normally the first payment of a deposit of 10% must be made upon
signing of the Sales and Purchase Agreement (SPA). Please ensure
that the date of signing of the SPA and the date of the first
payment are the same. Be aware that the housing developer is not
allowed to collect any form of payment without a Sales and Purchase
Agreement being signed.
Architect's Certification
Make sure any demand by the developer for instalment payments is
supported by a certificate duly signed by an architect or a
certified engineer.
Interest on Late Payments
If the buyer or end financier for the buyer fails to pay the
developer the progressive payment/installment
within 21 working days from the date of the written notice of
payment from the developer, the buyer will usually be charged an
interest of 10 per cent per annum on the installment
not paid.
Termination of the Sales and Purchase Agreement (SPA)
Be aware that failure to make the progressive payment or interest
charged on late payment for a period of more than 28 days will give
the developer the right to terminate the Sales and Purchase
Agreement. The developer must serve the notice in writing by
registered post of its intention to terminate the SPA.
Infrastructure Maintenance
Buyers will normally pay the cost of maintaining the infrastructure
from the date of vacant possession till the date the responsibility
is taken over by the local authority or management corporation (in
the case of a subdivided building).
(Infrastructure is defined as roads, driveways, drains, sewerage,
pipelines and sewerage tanks for the housing development or
buildings).