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Costs for Foreigners Buying Residential Property in Malaysia




When considering purchasing residential property in Malaysia, especially in Kuala Lumpur City Centre (KLCC), it's essential for foreign buyers to be aware of various costs and fees involved. Here’s a comprehensive breakdown:


1. Property Price

Foreigners are generally required to purchase properties priced above a minimum threshold, which varies by state. In Kuala Lumpur, the minimum price is RM1 million for foreign buyers


2. Stamp Duty

Stamp duty is a significant cost for property buyers. The rates are tiered as follows:

  • 1% on the first RM100,000

  • 2% on the next RM400,000

  • 3% on the subsequent amount up to RM1 million

  • 4% for amounts exceeding RM1 million​


3. Legal Fees

Legal fees for the Sale and Purchase Agreement (SPA) and loan agreement are calculated on a sliding scale:

  • 1% for the first RM500,000

  • 0.8% for the next RM500,000

  • 0.7% for amounts between RM1 million to RM3 million

  • 0.6% for amounts between RM3 million to RM5 million

  • 0.5% for amounts over RM5 million


4. Real Property Gains Tax (RPGT)

If a foreigner decides to sell the property, RPGT applies:

  • 30% if the property is sold within the first five years

  • 10% if sold in the sixth year or later​


5. Financing Costs

Foreign buyers can obtain mortgages in Malaysia. Local banks often offer 60% to 80% financing depending on the buyer's financial status and the type of property. Additionally, being part of the Malaysia My Second Home (MM2H) program can facilitate easier access to home loans​


6. Miscellaneous Costs

Additional costs include valuation fees, administrative fees, and insurance costs. It's also advisable to hire an independent legal representative to conduct due diligence to ensure the property is free of legal issues or encumbrances.


Understanding these costs will help foreign buyers better plan their investments in Malaysian real estate, ensuring a smooth and informed purchasing process.

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