Ultimate Guide to Buying Malaysia Property In 2018
Property Market trends in Malaysia:
Malaysia is a vast country with several acres of free land for constructing and developing. The property index always remains flat but, presently there has been demand for purchasing properties. More people are shifting to urban surroundings to be near workplaces. Daily commuters can avail transportations such as monorail lines around Bukit Bintang. By late 2026, the high-speed rail (HSR) should be ready for commuters to reach the Kuala Lumpur City Centre (KLCC).
Financial resources provided by Malaysia and China governments have been used for rebuilding and redeveloping KLCC. Singapore’s En Bloc redevelopment techniques have been repeated by Malaysia’s KL property market. It focuses on integrating hotels, apartments, shopping centres, and entertainment areas with residents. It establishes areas for meetings, incentives, conferences, exhibitions and transportation hubs.
Kuala Lumpur 2018
Budgets, Costs, Loan Documents
- Down payment:
Generally, the down payment for the property that is bought ranges at 20% upfront. Yet, this percent can vary depending on how much home loan you get from the bank. If your bank provides you 90% loan, then you require paying only 10% as down payment. If your bank provides a loan of 80%, then you have to pay 20% as down payment right away. However, in certain cases, you may have to procure the Sales & Purchase (S&P) agreement.
- Stamp Duty on Temporary Occupation Permit (TOP):
After the completion of the property, you have to pay the final fees for the Temporary Occupation Permit (TOP). As per the TOP, you become the rightful owner of the property. Processing the TOP takes around 6 months since it involves checking all proceedings. The TOP fees are charged as tier cost. The price depends on the total value of the property you have bought. The TOP fees, including the government tax as well as disbursement fees, are usually found to be around 3% minus 6000RM.
- Additional Costs:
Sometimes, when you purchase new development you might have to pay extra costs that mainly include the repair and renovation costs, or in other words the maintenance fees.
Guidance to home loans
- The Flexi Home Loan:
This loan is an alternative to the Standard Home Loan that is prevalent in Malaysia. When you have extra cash flow, it is advisable that you take this Flexi Home Loan. You will find that the interest rates are lower and changeable with the fluctuation in the market. Since you keep on adding more money to your account, your interest rate lowers. Ultimately, you can withdraw your money whenever it suits you.
As per the present market conditions, the current rates of interest is around 4.5%. Those who are native Singaporeans or hold a valid Singapore PR, can avail up to 80% home loan. For the foreigners who are residing in Singapore, the loan amount can go up to 60%. If a person needs to borrow 1 million RM from any of the leading banks in Malaysia, then a minimum income of 6000 – 8000 SGD is the basic eligibility. It is worthwhile to note here that this income can be a joint income in case of married couples. The tax that is levied on buying properties stands at 6% (yearly).
The bank provides you with the offer letter. This letter states the amount of loan, interest rate and duration to repay the loan. Your amount of loan determines the down payment for your interested property. If you forget to repay and have prevailing interest, then, you have to pay more than your interest rate as stated in your offer letter.
According to the Real Property Gains Tax (RPGT) or Capital Gain Tax, Malaysians have to pay on profits from selling their properties. As per the Budget 2014, all property owners paid as follows:
|Profit Percentage Paid||For Properties Sold|
|30%||within 3 years or less|
|20%||within 4 years|
|15%||in 5 years|
|0%||over 5 years|
Capital gain tax (foreigner)
As per the Real Property Gains Tax (RPGT) or Capital Gain Tax, foreigners settled in Malaysia have to also pay on profits from selling their properties. In the case of foreigners, they have to pay 30% for properties within 5 years and 5% for properties over 5 years.
|Profit Percentage Paid by Foreigners in Malaysia||For Properties Sold|
|30%||within 5 years|
|5%||over 5 years|
Advantages of investing in Malaysia
- Freehold property investment
The best thing about investing in Malaysia is the policy of “freehold” properties. This essentially means that no other authority or entity is entitled to claim ownership of an estate other than the actual owner. Moreover, the owner is allowed to use that land for any purpose, of course abiding by the local laws.
- Lucrative rental yield and zero rental tax
Investment in Malaysia comes with a potentially high rate of rental profits. With the current boom in the realty sector, owners can look forward to a possible rental yield of at around 4.5% in this country. Moreover, there are no rental taxes to be paid to the government, unlike many of the neighbouring countries.
- Lucrative Loan Disbursement amounts
As already mentioned earlier, the native Singaporeans or Permanent Residents in Singapore are eligible for loan amounts up to 80%. One can look forward to investing in real estate without weighing down heavily on the pocket.
- Interest Rates
The Central Bank of Malaysia has set the benchmark for interest rates in the ratio of 1:3 at 3.25% as of now.
- Low cash expenditure
This is especially suitable for those who have a steady source of income but not much liquid cash at their disposal.
- Policy changes
One factor that must clearly be taken into account is the frequent change in real estate policies by the government of Malaysia.
- Dearth of demand
Although there is an oversupply of real estate investment opportunities, there are few who seek rental accommodation.
SO Sofitel Residences
You can view the city’s exclusive city centre that can be viewed from the dining hall. The 50 acres of Kuala Lumpur City Centre Park has several rooftop bars, many theme super clubs near the SO Sofitel Residences. Residents enjoy lifestyle venues and key amenities. They can walk to the nearby two LRT stations to commute to their important business centres. The Petronas Twin Towers is located nearby too.
- SO residences gatekeeper and security services provided for 24×7 hours.
- Services include Bell or valet, dedicated owner, resident DJ, and screening room.
- Digital access to daily newspapers including magazines
- Mixo Residents’ Lounge is unconventional and lively. Residents can use the lounge to welcome, interact and entertain guests and other residential members.
- The Sofit fitness centre provides all residents with a complete workout while admiring the Kuala Lumpur city centre skyline.
- South East Asia’s highest roof-top swimming pool is on level 77 of SO Sofitel. Residents can swim and admire the skyline of Kuala Lumpur city.
- Resident owners of SO Sofitel at Kuala Lumpur would get access to Accor Hotels Group. They would have the privilege of becoming the highest tier members (Platinum Membership)
- Specially located – 250m walking distance from Petronas Twin Towers (Twin Towers of KLCC) and 50-acre lush green KLCC Park.
- There are already two LRT stations at KLCC and Ampang Park Station. In the near future, two MRT would also open for services.
- In-house housekeeping and maintenance
- In-house dining, catering, and discounts at restaurants, in-house dining, and catering
- In-house SoSPA treatments offered at a discount.
- Take advantage of discounts related to Solution Centres.
- SoFit Programs with a personal gym trainer, yoga trainer and health consultant.
- Shopping and person assistant
- Laundry services
- Private transportation including limousine services. Discounts included.
- SO Lifestyle Programs such as customized lifestyle/experienced lifestyle created by Residence Team
- Enjoy ownership benefit program from Accor Hotels Group.
- Maintenance package in your absence.
- Services called “a la carte”.
- Platinum membership of Le Club Accor Hotels.
- Get to sit where you wish at So Pool parties.
- Discounts on meeting spaces, guest rooms for visitors.
- Ambassador Program
- Discount on guest rooms (visitors)
- Invitations to join exclusive events held at other hotels within the Group.
- Residents can access and take advantage of the Partner Golf course
- Residents can charge privileges at other hotel outlets.