Buying: the paperwork and the money
On 1 January 2026 the cost of buying as a foreigner changed, and not by a little.
Stamp duty, the state levy, legal and valuation scales, statutory protection and borrowing are all separated out below, each with its source. To put numbers on your own purchase, use the buying-costs calculator.
Stamp duty: 8% for foreign buyers
From 1 January 2026, a non-citizen individual, a non-permanent-resident or a foreign company pays a flat 8% stamp duty on residential property.
The authority is section 29(b)(ii) of the Finance Act 2025, inserting item 32(ab) into the First Schedule of the Stamp Act 1949. Royal assent 27 December 2025, gazetted 31 December 2025, in force 1 January 2026.
Two details most summaries drop:
1. It is charged on consideration or market value, whichever is greater — not simply the price you agreed.
2. Malaysian permanent residents are outside it. The limb reads “not a citizen and not a permanent resident”, so PRs stay on the tiered citizen scale.
“Residential property” now has a statutory definition (section 26): a house, condominium, apartment, flat, service apartment or small office home office solely to be used as a dwelling house.
Source: Akta Kewangan 2025 (Akta 874), gazetted 31 December 2025.
| Buyer / property type | Rate | In force |
|---|---|---|
| Citizens and permanent residents (residential) | First RM100,000 1% Next RM400,000 2% Next RM500,000 3% Excess above RM1,000,000 4% |
Current tiered scale |
| Non-citizens, non-PRs, foreign companies (residential) | Flat 8%, no tiering | 1 January 2026 |
| Non-citizens, non-PRs, foreign companies (non-residential) | Flat 4% | 1 January 2024 |
| Loan agreement | About 0.5% of the loan Sources differ — see below |
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Is loan agreement stamp duty 0.5%, or can it be 1%?
The first-home exemption, which foreigners cannot use
The current exemption sits in P.U.(A) 53/2021 (instrument of transfer) and P.U.(A) 54/2021 (loan agreement), extended to 31 December 2027 by P.U.(A) 448/2025 and 449/2025. Conditions: market value not more than RM500,000, one unit only, and the buyer must be a Malaysian citizen who has never owned any residential property.
So it does not apply to a foreign buyer. It is mentioned because many online calculators leave it switched on by default, which produces a figure that is too low.
(Not a foreign-buyer point, but worth knowing) Does the first-home exemption cover service apartments and SOHO?
The Johor state levy
Buy in Johor and there is a state levy on top of the 8%. It was raised in 2025 from 2% to 3%, and to 4% for industrial.
| Transaction | Old rate (2014) | Current |
|---|---|---|
| Residential — from a developer | 2% or RM20,000, higher | 3% of the stamped SPA value, minimum RM30,000, higher |
| Residential — subsale | 2% or RM20,000 | 3% of valuation department figure or SPA value, minimum RM30,000, higher |
| Commercial — from a developer | 2% or RM20,000 | 3%, minimum RM30,000 — except a minimum of RM50,000 for a serviced apartment or SOHO below RM1,000,000 approved by the state authority |
| Industrial — all | 2% or RM20,000 | 4%, no minimum |
| Love and affection, immediate family | 2% or RM20,000 | 2% of the valuation department figure, minimum RM20,000 |
| Transmission on death | Nil | Nil |
Flat fees are charged per title as well: application registration RM2,000, extension of approval validity RM2,000, late-levy penalty RM2,000, appeal against rejection RM3,000, and love-and-affection transfer to a foreigner RM20,000.
And a separate registration fee (not the levy): on transfers above RM1,000,000, RM4,500 plus RM250 per additional RM50,000 for citizens — but RM400 per additional RM50,000 for non-citizens. Johor Land Rules (No. 1) (Amendment) 2026, in force 1 April 2026.
Source: PTG Johor fee schedule (read 22 August 2026); Pekeliling PTG Johor Bil. 03/2025, signed 13 June 2025.
Did the new Johor rates start on 1 July or 1 September 2025?
Both agree on the transitional rule: the old 2% still applies where the SPA was signed and stamped before 1 July 2025 and a complete consent application with stamped transfer was lodged with the land office on or before 29 August 2025.
Legal fees: the Solicitors’ Remuneration Order 2023
In force since 15 July 2023, replacing the 2005 order. The sale and the loan are charged separately.
| Tranche | General / subsale (Table A) | From a licensed developer (Table B) |
|---|---|---|
| First RM500,000 | 1.25% (minimum RM500) | RM50,000 or less: RM500 RM50,001–250,000: 75% of Table A |
| Next RM7,000,000 | 1% | RM250,001–500,000: 70% RM500,001–1,000,000: 65% |
| Above RM7,500,000 | Negotiable, not exceeding 1% | Above RM1,000,000: 50% |
Foreign buyers carry one extra line: the fee for applying to the state authority for consent (Fifth Schedule) — RM200 per application where the consideration is RM100,000 or less; RM500 from RM100,001 to RM1,000,000; and RM3,000 per application above RM1,000,000.
There is a discount where no title had issued when the transaction first completed: Sixth Schedule rule 2 caps the fee at 25% of the applicable scale.
Source: Solicitors’ Remuneration Order 2023 (Malaysian Bar Circular 258/2023, 19 September 2023)
Valuation fees
Seventh Schedule to the Valuers, Appraisers, Estate Agents and Property Managers Act 1981: 0.25% on the first RM100,000, 0.20% on the residue up to RM2 million, then descending. Minimum RM400 per property.
For completeness, the same Act caps estate agency fees at 3%, with a minimum of RM1,000 per property.
New build vs subsale: the protection gap
The Housing Development (Control and Licensing) Act 1966 protects buyers from licensed developers. It does not apply to subsale purchases at all.
That is not a difference of degree. It is the difference between having the protections below and having none of them.
| Schedule G (landed) | Schedule H (strata) | |
|---|---|---|
| Applies to | A house with its subdivisional portion of land | A parcel in a subdivided building |
| Vacant possession | 24 months from the date of the agreement | 36 months from the date of the agreement |
| Late delivery (LAD) | 10% per annum of the purchase price, calculated day to day | 10% per annum of the purchase price, day to day |
| Common facilities | Not applicable | Within 36 months; LAD at 10% per annum of the last 20% of the purchase price, day to day |
| Defect liability period | 24 months after vacant possession; developer to repair within 30 days of written notice | 24 months after vacant possession, covering the parcel, the building and the common property |
Booking fees are not lawful. Regulation 11(2) of the 1989 Regulations: “No housing developer shall collect any payment by whatever name called except as prescribed by the contract of sale.” Breach carries a fine of up to RM5,000 and/or up to three years’ imprisonment under regulation 13(1).
Keep the booking fee receipt anyway — the reason is immediately below.
Source: P.U.(A) 58/1989, Schedules G and H as substituted in 2015.
Three decisions that changed how LAD is calculated
- PJD Regency (Federal Court, 19 January 2021): the clock for late delivery runs from the date the buyer paid the booking fee, not the date of the SPA. Which is why the receipt is worth keeping — it can be worth several months.
- Ang Ming Lee (Federal Court, 26 November 2019): regulation 11(3), the Controller’s power to grant developers extensions of time, was held ultra vires.
- Obata-Ambak (Federal Court, 29 July 2024): Ang Ming Lee applies prospectively, not retrospectively, and the court addressed when time starts running for limitation.
How to actually claim, the monetary ceiling and the deadline are in section 5.
Is a serviced apartment on commercial-titled land protected by the HDA? This one matters more than most for foreign buyers in JB and KL.
Why this matters to you specifically: a great many of the serviced apartments sold to foreigners in Johor Bahru and Kuala Lumpur sit on commercially designated land. If the HDA does not apply, then the whole table above — the 24 and 36 month deadlines, the 10% LAD, the 24-month defect liability, the Tribunal — may not be available to you at all.
This is not something to settle by reading articles. It turns on which Schedule your contract is on and what the land use category says on the title. Get your solicitor to answer both, in writing, before you sign.
Mortgages: what a foreigner can actually borrow
First, a widely repeated claim that is not correct: there is no Malaysian rule capping loan-to-value by nationality or residency.
Bank Negara’s only LTV rule is a 70% cap on the third housing loan (announced 3 November 2010), and it says expressly that first and second homes “follow individual banks based on their internal credit policies”.
The Foreign Exchange Policy Notices go further. Notice 2, paragraph 14 lets a non-resident borrow ringgit in any amount from a resident to finance “Real Sector Activity”, and that definition expressly includes the purchase of residential or commercial property. So the constraint is the bank’s credit policy, not the law.
Equally unverified: the claim that banks apply a 10–20% haircut to foreign-currency income when calculating debt service ratio. It sounds plausible; I could not source it.
What can be verified (Bank Negara Foreign Exchange Policy Notices, in operation from 1 October 2025):
- A non-resident may open and maintain an External Account with a Malaysian financial institution, and a foreign currency account with a licensed onshore bank.
- Banks will ask for documentary evidence of the purpose of transactions — keep the SPA, the transfer, the state consent and any tenancy agreements.
- Rent may be received in ringgit first and converted for repatriation later.
Exchange rate cost: the fee nobody quotes you
You convert twice, and pay a spread both times. Foreign currency into ringgit when you buy; ringgit back out when you sell or repatriate rent.
The bank does not give you the mid-market rate — the difference is the spread. It appears on no schedule of fees, and on a seven-figure purchase it can exceed the legal fees.
What is verifiable: the FEP Notices require ringgit conversion to go through a licensed onshore bank or an appointed overseas office, and repatriation must be made in foreign currency — you cannot simply wire ringgit out.
The one thing worth doing: before you complete, ask two or three banks what rate you would actually receive on your amount today, and insist on the final rate rather than “mid plus X points” — the latter sounds cheaper and frequently is not.
How money leaves Malaysia is covered in section 4.
Source: BNM FEP Notice 4
The full timeline, from booking fee to strata title
Every step below carries its statutory deadline and, where it exists, the gate that only applies to foreigners. On a subsale purchase, steps 1, 5, 6 and 7 do not apply.
| Step | What happens | Deadlines and what to watch |
|---|---|---|
| 1. Booking fee | The developer takes a “booking” to hold the unit | Not lawful. Regulation 11(2) of the 1989 Regulations: no developer may collect any payment by whatever name called except as prescribed by the contract of sale. Keep the receipt anyway — the Federal Court in PJD Regency held that late-delivery damages run from the date the booking fee was paid, not from the agreement. That receipt can be worth months. |
| 2. Sign the SPA | Schedule G or Schedule H is executed | Landed uses Schedule G, strata uses Schedule H. Establish which one you are signing — the delivery deadlines are 12 months apart. The statutory forms do not apply where the CF or CCC has already issued. |
| 3. Stamp duty | Transfer and loan instruments are stamped | Residential property bought by a foreigner: flat 8%, on consideration or market value, whichever is greater. Moves to self-assessment on 1 January 2027. |
| 4. State consent foreign buyers only |
Application for approval under section 433B | The applicant is the vendor (section 433E). Johor decides below RM10m in roughly 2–3 weeks, or 1–3 months where a valuation is needed; Selangor 4 weeks. The levy must be paid within 30 days of the approval notice or the approval lapses (section 433G). Without the approval the dealing is void and both sides face a fine of not less than RM100,000. |
| 5. Financing | Bank approval and release | No statutory loan-to-value cap by nationality; the limit is the bank’s credit policy. The FEP Notices permit a non-resident to borrow ringgit in any amount to buy property. |
| 6. Vacant possession | The developer hands over | Schedule G: 24 months from the date of the agreement Schedule H: 36 months from the date of the agreement Late delivery: 10% per annum of the purchase price, day to day. Strata common facilities are separate, at 10% per annum of the last 20% of the price. |
| 7. Defect liability period | Defects can be put back to the developer | 24 months from vacant possession. The developer must repair within 30 days of written notice. The word written matters — a verbal complaint counts for nothing at the Tribunal. |
| 8. Strata title | Your name reaches the land register | The developer must apply within three months of the superstructure stage certificate (section 8, Strata Titles Act) — not on handover. The usual blocker: section 9(2) bars the application while the land remains subject to a charge. |
Holding costs: what you pay every year once you own it
| Item | Paid to | Basis and notes |
|---|---|---|
| Assessment Cukai Pintu |
The local council | Charged on assessed annual value, set by each local council, usually billed half-yearly. Rates differ by council, so no figure is given here — see the note below. |
| Quit rent Cukai Tanah |
The state land office | Charged on title area or share, annually. On strata it is apportioned by your share units. Rates differ by state, so no figure is given here. |
| Maintenance charge Service charge |
The JMB or management corporation | Section 25 of the Strata Management Act 2013 makes this a statutory obligation of the parcel owner, calculated by share units. |
| Sinking fund | The JMB or management corporation | Also a section 25 obligation, but a separate sum from the maintenance charge. It funds major repair and renewal, not day-to-day running. Ask about the two separately when viewing — sales staff often quote only the maintenance charge. |
| Fire insurance | Insurer / management body | Part VIII of the Strata Management Act (sections 93 to 100): section 93 imposes the duty to insure, section 100 the obligation to rebuild. On strata the management body usually insures the building itself. |
| Medical insurance MM2H only |
Insurer | Compulsory for MM2H participants under 60. |
A deduction detail worth knowing early:
Public Ruling 12/2018 enumerates what may be deducted from rental income: assessment and quit rent, loan interest, fire insurance premium, rent collection and enforcement costs, the cost of renewing a tenancy or changing tenant, and ordinary repairs.
That list does not name the maintenance charge or the sinking fund. They may fall within “ordinary repairs”, or they may not — I do not know, and I am not going to guess on your behalf. Get your tax agent to answer on those two specifically, because on a strata unit they are usually the largest annual outgoing.
When you view, ask the management office for copies of the last assessment and quit rent bills, plus the last two years of management accounts and the sinking fund balance. Those three documents beat any estimate — and an inability to produce them is itself an answer.
One administrative change that will reach you in 2027
Stamp duty is moving to self-assessment in three phases: phase 1 (1 January 2026) covers tenancies and securities; phase 2 (1 January 2027) covers instruments of transfer of property; phase 3 follows in 2028. From 2027 the responsibility for getting the assessment right shifts onto the taxpayer.
State floors and state consent are in section 2.
What this page cannot do
Everything above is the general rule. General rules do not decide your unit. Tenure, state, price and developer have to be read together before there is an answer, and all four have to be checked one at a time.
One more thing worth saying plainly: I am not a lawyer and I am not a tax adviser. This section collects the official material, dates it and cites it so you know which questions to ask. Before you sign anything, have your own solicitor confirm it against your contract.
If you want a specific development checked, WhatsApp me or send an email.
Louis Koh · 11 years in Malaysian property
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