A progressive and secure country with modern infrastructure and an attractive business environment, Malaysia is a popular destination for real estate investment and has gained traction over the years among Pakistanis.
Buying real estate in Malaysia as a foreigner is fairly simple. You must be above the age of 21 and the property you purchase must be valued at RM 500,000 ($160,000) or above. However, sale of bumiputra or native properties in certain areas is restricted for foreigners.
Property can be purchased either by going to Malaysia, or through real estate agents specialising in overseas property in Pakistan. There is no restriction regarding the number of properties one can buy.
The capital city Kuala Lumpur and the scenic island of Penangare popular locations for foreign investors. Freehold condominiums in both these cities have a potential return on investment of eight percent per annum; foreign investors can also purchase vacant plots there.
Foreign investors can secure a property loan from banks in Malaysia. Local banks can extend loans of up to 90% of the property price. The transaction takes between six months and a year to be processed and usually requires a two percent payment on booking followed by another eight percent when the sale agreement is signed. Properties bought by foreigners also require the land office’s consent; this process usually takes about three months.
If a property is sold within two years of purchase, a 10% tax is levied on the profits gained; a five percent tax on profits gained is imposed on properties sold two to five years after their purchase. Residential property sold after five years is not taxed for profits gained.
– Khairul Anuar Shaharudin
The writer is the author of 40 Questions You Should Ask Your Lawyer Before
First published in the Real Estate Section of The DAWN National Weekend Advertiser on February 19, 2012