Buying a Property in Malaysia

BUYING A PROPERTY IN MALAYSIA

6 December 2007

INTRODUCTION OF MALAYSIA

Malaysia is one of southeastern Asia (ASIAN) country and located in Southeastern Asia, peninsula bordering Thailand, northern one-third of the island of Borneo, bordering Indonesia, Brunei, and the South China Sea, South of Vietnam. Malaysia had colonized by Great Britain during 18th and 19th centuries. It also occupied by Japan from 1942 to 1945. After two years later, Malaysia got an independent from Great Britain in 1957.

During the term of Prime Minister Mahathir bin Mohamad (1981-2003), Malaysia was successful in diversifying its economy from dependence on exports or raw materials, to expansion in Manufacturing, services, and tourism. Malaysia total area both land and water is 329,750 sq km. The capacity of Malaysia is Kuala Lumpur. The biggest group of religion in Malaysia is Muslim and other religions are Christian, Buddhist, Hindu and Confucianism, Taoism, and some traditional Chinese religions. Malaysia official language is Bahasa Malaysia and second language is English.

The government type in Malaysia is constitutional monarchy. Country nominally headed by paramount ruler and a bicameral parliament consisting for not elected upper house and an elected lower house. Malaysia has 13 states and the powers of states governments are limited by federal constitution and under terms of federation. Malaysia has two representatives of constitutional prerogatives, there are Sabah holds 25 seats and Sarawak holds for 28 seats. The legal system in Malaysia is based on English common law.

The economy overview of Malaysia is a middle-income country. The most particularly export is electronics. As a result, Malaysia was hard hit by the global economic downturn and the slump in the information technology in this 20th century. According to the CIA report the economy of Malaysia has grew 4.9% in 2003 and growth topped is 7% in 2004 and 5% in 2005. Oil and gas are the higher world energy prices. The government presented for national development of higher value added manufacturing and an expansion of the services sector in five years.

ROLE OF THE MALAYSIA GOVERNMENT

Firstly, Malaysia is one of developing economies country in ASIAN. Malaysia government hold a large role played in policy making, regulation and actual day-today management of the economy both the International level and the enterprise level. In some economies there is a hold of government owned companies. The role of the government in Malaysia has divided into two forms

• Institutional support

• Leadership

The first form is institutional support which is undertaken by Malaysian housing developers. Institutional support to the Malaysian housing developers is provided by the Malaysian government through setting up of institutions like the South-South Co-operation Company, Export-Import Bank, and Malaysian External Trade organization, Construction Industry Development Board, agencies that have been entrusted with the overall support of Malaysian companies in the international level, with a special mission to enter in projects that are directed towards developing economies (by Malaysia housing developers).

The second form is the leadership support; the Malaysian government led by the former Prime Minister Dr. Mahathir Mohamed has worked very hard to promote Malaysia and Malaysian firms in developing countries. Malaysian firms have gained from the goodwill grows to Malaysia’s image as a leading developing country, with a success model that can be emulated by other developing countries. Political leadership has strongly supported the form of trade mission of housing developers.

BUYING A PROPERTY IN MALAYSIA

Malaysia is one of the developing countries in Southeast Asian that is rich with natural resources and culture. Although the size of the country is small but it can’t stop foreigners to look forward to the opportunity to buy properties and invest business there. A high return on investment (ROI) is the decision maker for the owner. Malaysia is trying to make itself as a hub of business and a gate way to Asia to compete with neighboring countries like Thailand and Singapore. With an economic and politic stability makes Malaysia become one of the lead countries in Southeast Asian. One of the most beneficial businesses is the property. It is one of the fastest growing property investments compare to the other Asian countries. This is raising a demand on investing property in Malaysia. The government also set up and campaign “Malaysian is my second home scheme” by allowing a 10 years renewable visa subject to the eligibility.

First, let’s look at who is eligible to purchase a land.

All Malaysian citizens are freely own or purchase any land depends on the eligibility. Properties on Malay reserved land cannot be owned by foreign investors.

Foreigners are allowed to purchase two properties in Malaysia. Foreign investors are not eligible to buy medium and Low-cost property price at RM 42.000 and below

Second, Title

There are two types of title

• A freehold title allows the owner perpetual ownership.

• A leasehold allows the owner to possess the property in certain period. When the contract ends, the property must be return to the authority who issue the title.

A house is issued a title for the piece of land that it is located.

An apartment or condominium is issued a strata title by the specific area and floor on the building where it is located.

Third, Buying Procedure

The buying procedure of property in Malaysian is similar to the UK. Oversea investors are eligible to buy up to two property at a cost of less than RM 150,000 After you have selected your property, a letter of offer and acceptance is singed and it’s 3% deposit payment is normally expected from the purchaser. Within 14 days, the buyer must pay a further 7%. Make sure that there