Penang is a popular property investment spot for foreign buyers.
Singaporeans continue to see the allure of Malaysian property, with bigger homes at lower prices than back home. But what must you know before taking that step to becoming a property owner in Malaysia?
by Cheryl Marie Tay
- Seek legal aid before all else
Before you get in touch with any sellers or make any decisions, hire a real estate lawyer to guide you through your property selection and purchase process.
A reliable, experienced lawyer will ensure you do not miss out on any important details, and will take care of all the relevant legal documents pertaining to your purchase.
He will also be useful in providing you with vital information so you can handle yourself more confidently, should he be physically absent at any point in the process.
- Familiarise yourself with the numbers
Unless you qualify for and are participating in the Malaysia My Second Home (MM2H) programme, foreigners cannot buy Malaysian property that costs below RM1 million (S$332,086) and in some states — such as Penang island and Selangor — RM 2 million (S$664,172) is the minimum purchase price for foreign property buyers.
At the same time, take note of taxes, fees and duties. Stamp duty for property costing over RM500,000 (S$166,043) is three percent, and legal fees are based on the property value: 0.6 percent for property costing between RM1 million and RM 3 million, for instance.
- Familiarise yourself with the process
Once you’ve decided on a property, a Letter of Offer / Acceptance is signed, and you must pay a three percent deposit. The Sale and Purchase Agreement (SPA) must then be signed within the next two weeks, whereupon you have to pay another deposit, this time of seven percent.
You then have a maximum of three months to fully pay for the property. The SPA must be stamped at the Stamp Office. After the valuation department has examined the property, you must pay the Stamp Duty to the Stamp Office, then register the transfer at the Land Office Registry.
- Get the best value for your money
We’re not talking about cutting corners or settling for shoddy apartments in shady neighbourhoods, but about minimising your expenditure while still getting a high quality property in a good location.
The MM2H scheme is open to Singaporeans who meet its income and liquid asset requirements, allowing them to live in Malaysia and, in states like Sarawak, buy property for as little as RM300,000 (S$99,620). This is much lower than the minimum price of RM1 million (S$332,086) to RM2 million (S$664,172) a foreign buyer not participating in the scheme must spend on a Malaysian property.
- Hire an experienced estate agent
Besides a real estate lawyer to see to the legal arrangements of your property purchase, a trustworthy, experienced estate agent is also vital in helping to minimise risks and handle any unexpected occurrences (be it with the seller, developer, or property itself).
Someone familiar with the Malaysian property market, especially in the state or city in which you intend to buy, is indispensable as he can provide crucial insider information. He can also alert you should he spot anything suspicious when dealing with developers and potential sellers. You can find agents in 16 different Malaysian states in PropertyGuru’s network (bit.ly/2baXyqj).
- Don’t underestimate your network
If you have friends and / or family in Malaysia, do not hesitate to contact them. They can provide useful information on certain locations in the country so you know where to buy property and where to avoid doing so.
If you are even luckier and you know property professionals in Malaysia, tap into their knowledge of the industry to better prepare yourself for the selecting and buying process. Just remember to be polite and respectful at all times, and after you’ve finally bought your property, maybe treat all those who helped you along the way to a well-deserved feast.
- Get a virtual overview
Before you decide on which state you would like to purchase property in, take advantage of modern technology and get a good, thorough look at the neighbourhoods you have in mind. Google Maps Street View is a good way to do so.
You can even use PropertyGuru’s network of sites to get detailed views of individual homes, thanks to their virtual tours and 3D virtual showcases; you can visit our Malaysia website (bit.ly/2aGF8c1) to search for properties. YouTube also has countless videos offering similar features.
- Make sure it’s real life, and not just fantasy
Once you have a clearer idea of where and what you prefer to buy in Malaysia, it’s time to travel there to get a real-life taste of what you may be signing up for in the near future. This will allow you to experience the property and its environment for yourself, and at different times of the day.
You will also be able to find out if there are important amenities in the vicinity, such as supermarkets, shops, public transport, schools and malls. If you are moving there with your family, bring them along to ensure you are all on the same page.
- Don’t get ahead of yourself
While you may well be able to afford a Malaysian home and meet the criteria for foreign buyers, being hasty, especially with such a major decision, is never a good idea. If you have set your sights on an incomplete condominium project, take extra caution.
You may be vulnerable to default because of issues with The Housing Development (Control & Licensing) Act 2002 and Strata Titles Act.
If you are really keen on a unit in a condo that is still in the works, make sure the developer has a valid Developer’s License and Sales & Advertising permit.
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