Buying land in Malaysia has its benefits, from potential high profits on your investment and space to building a home that is genuinely yours – thus leaving you with a very satisfying start.
But do you have the list of requirements needed before you can purchase that perfect spot of land, be it in the eyes of a local or foreigner?
If you need a simple guide, we have just the steps you need to finally make that purchase and call yourself a proud landowner in Malaysia.
| What will we be covering? |
1. What are the types of land for sale in Malaysia?
Finding the correct type of land usually should start with the right kind of agreement under which land is held;
- Freehold – outright ownership for an undefined period.
- Leasehold – ownership held for a set period up to 99 years, with the lease expiring or requiring renewal.
Remember, in Malaysia, there are certain types of land to be sold or purchased to Malay individuals or corporations under the Malay Reservations Enactment, so be aware of this when searching for land. If not, try looking into the types of land below;
- Residential Land
This type of land is used to build housing properties, such as single-family houses, multi-family houses, condominiums or apartment buildings – the most popular land for purchase and the most expensive.
- Commercial Land
If you are a business and looking for land dedicated to parks, parking lots, a gym, a restaurant or a project developer, these lands are ideal to start your ventures. However, you don’t necessarily need to build anything on that commercial land yourself – lease the land to a company, bringing you good rental yields.
- Agricultural Land
For those looking for development for agricultural land such as palm oil plantations, agricultural land is the one you can rely upon one. However, these lands are only allowed to be purchased by Malaysians.
- Vacant Land
Much cheaper compared to residential and commercial land but brings the same kind of benefits and drawbacks.
2. What is the process and requirements to purchase the land we’ve chosen?
Before anyone can start digging and building their ideal home, let us brush on some historical facts on the Torrens System – land ownership and transfer system. The national government is responsible for managing and recording the rightful land ownership.
In layman’s terms, the Malaysian government has the authority over land ownership within Peninsular Malaysia. So any valid land purchase must include official registration to be legally binding.
Firstly, get a copy of the Issued Document of Title – this deed represents the rights and essential information to the land where any buyer can have to obtain legal interest, which can be located at your local land office.
Secondly, calculate the cost you need – find out how much the land cost on several factors such as the land size, location, vicinity to transportation links and future development. The price is usually calculated in “per square feet” unit; buyers may use this to compare with neighbourhood land market price as a reference.
Thirdly, where will you be located – the ideal location might be the prime factor influencing the property price.
Fourthly, drive to the land you wish to purchase – a look into the area with the presence of a certified land surveyor (where they can execute the critical function in undertaking feasibility research or ecological effect tests on potential sites to evaluate whether plans are appropriate or not) is essential. It will emphasize all limitations, services, expense utility collections, public or other privileges, flood risk, and many more.
3. What are the documents needed for the said purchase of land?
- Sign the agreement alongside the landowner
During signing the sale and purchase agreement, ask the landowner what other necessary documentation is needed in the presence of your agents, brokers and lawyer. Unlike the additional agreement, the seller or landowner is not responsible for any up-keeping of the property when the deal is signed.
- Protect your interest by having a Private Caveat
A caveat document notices that an individual can claim unregistered interest on a particular land. As a purchaser, you need to provide details and a claim to protect the seller’s interest. If not done correctly, the purchaser of the land won’t be the legal authority of said land if their interest isn’t registered with any Land Title Office in Malaysia.
- Ensure all forms of payment is completed
Ask the seller about the typical cost of purchase and its attached professional fees sustained. Before buying that land, it is essential to set up with the regional authority to carry your plan to execution eventually. Sign Form 14A, aka transfer of land documentation upon the payment of the entire purchase, which later needs to be sent to the stamp office for adjudication.
- Have your paperwork ready for future presentation
Ensure all your details are completed and correctly inserted, such as an address, title, pictures, proof of payment; the date of presentation of form 14A to the land office will be the date of registration. According to Malaysian law, the instrument of purchasing the land has to be presented for stamping within 30 days of the execution of the deal.
- Once all paperwork and payment are completed, it is time to collect the Land Title.
There are two noted types of land titles:
- General Registry Titles – held under the Land Titles Registry for land exceeding 4 hectares.
- Land Office Titles – held under the Land Office for areas below 4 hectares.
The Land Title is the official document registering the ownership of the land – it’s the official register under Malaysia’s land ownership legislation that ensures your request is legal and within the records.
To complete the transfer of ownership, you must inform the relevant official department under the oversight of the Department of Director General of Lands and Mines.
As a foreigner, can I purchase land in Malaysia and the steps?
We welcome all to have the opportunity to purchase land, and while Malaysia has some preferable foreign property ownership regulations, there are some general conditions you should be aware of;
- Properties that are valued below RM 1 million in most states
- Properties that are constructed on Malay reserved land.
- Low and medium-cost residential units, as defined by the authorities in each state
- Properties that are allocated for Bumiputera interest in any development project are also determined by state authorities.
Congrats! You’re now the proud owner of your very own land, ready to be converted into a 5-star restaurant, a gym for the ladies or a home for the elders – the sky is the limit!
Do you wish to talk to experts before making that big purchase? Chat with our professional team, a group dedicated to ensuring your purchase journey goes smoothly.
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