Cheaper properties now available to foreigners in Penang

Posted on Posted in Investments, MM2H, Penang, Property

Following my recent article on property purchase by foreigners (https://samchoong.com/2020/06/03/purchasing-

property-malaysian-secondary-market-foreign-purchaser-needs-know/), it was reported on June 11th, 2020 that the Penang state government is lowering the price threshold of properties foreigners are entitled to purchase. Here is the summary of the price threshold of properties available for purchase by foreigners in Penang (island):

  • The current price threshold for apartments is to be lowered from RM1,000,000/- to RM800,000/-;
  • The current price threshold for landed residential properties is to be lowered from RM3,000,000/- to RM1,800,000/-.

Our checking with the Penang land office as of the 16th June, 2020 indicates that this has not come into force although we expect this to be implemented soon. If you are looking to purchase one of these lower threshold properties, it would be prudent to check with your lawyer before signing an earnest monies contract or sale and purchase agreement. For further reading refer to:

https://www.freemalaysiatoday.com/category/nation

/2020/06/11/penang

-announces-cheaper-affordable-homes-drops-minimum-price-for-foreign-buyers/

Do note that until further updates, those holding Malaysia’s long stay visa, known as Malaysia My Second Home  (MM2H for short) are still entitled to purchase residential properties at an even lower threshold for Penang, namely RM500,000/-. For those of you thinking of obtaining MM2H for the purpose of making such property purchase, expect the approval timeline to remain approximately 6-9 months or longer as the Malaysian immigration are still practicing partial working from home. The MM2H requirements remain unchanged for now.

My 2019 article on the types of properties a foreigner can purchase needs to be read together with this update: https://www.freemalaysiatoday.com/category/nation

/2020/06/11/penang-announces-cheaper-affordable

-homes-drops-minimum-price-for-foreign-buyers/.

 

Further to the above lowering of price threshold for foreigners, the Government has also announced a real property gains tax (RPGT) exemption for Malaysians for disposal of up to three properties between June 1, 2020 and Dec 31, 2021. Although this article serves to guide a foreign purchaser, this RPGT exemption which applies only to a Malaysian vendor may be good to keep in mind just in case there is a gap between the offer price and the selling price. The savings from this RPGT exemption may well bridge this gap! For further reading refer to:

https://www.theedgemarkets.com/article/pm-reintroduces-home-ownership-campaign?type=malaysia

 

 

Author: Sam Choong

Sam Choong is a lawyer practising in Malaysia. His areas of practice include estate planning, wills and UK inheritance tax for expats residing or seeking to retire in Malaysia.

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