There will be 3% levy charged on top of the purchase price for non-Malaysian and MM2H buyer; 1.5% for property within the price range RM1,000,000 to RM1,500,000; and levy is applicable to both MM2H & non MM2H buyer.
There’s foreign consent fee of approximately RM10,000 per lot for residential title, and RM20,000 per lot if commercial title; aside from legal fee to the solicitor and stamping cost. The solicitor can provide you a cost breakdown in later stage based on the property value that you intend to purchase.
In Penang, buyer have to pay an agent fee and it's payable on the day of signing the sales purchase agreement. The rate is 1% based on the purchase price, plus 8% SST. For instance if you are buying a property of RM1,000,000, the agent fee would be RM10,800.
As a non-Malaysian property owner, you are not allowed to sell your property for the first 3 years; and there's with be a property gain tax (RPGT) of 30% for 1st year to 5th year, and 10% on 6th year and thereafter from the day you bought the property.
As a property owner, you need to pay quit rent and assessment bill which the bill will comes periodically on a fixed rate based on the property value; aside from the utility bills and building maintenance fee if you own a strata property.
Mortgage facilities is also available for foreigners. There are few oversea banks here in Penang like HSBC, Citibank and Standard Chartered bank just to name few. With sound credit ratings, most foreigners should have no problem obtaining Margin of Financing of 70% with banks in Malaysia. This could be even higher depending on the banks and financial standings of the applicants. The average interest rate of mortgage loans here is currently between 4% and 5%.
Process of buying a property in Penang
Once a property is selected, a Letter of Offer/Acceptance is signed between buyer and seller, and a 1%-2% earnest deposit is expected from the buyer.
Within 14 working days, the Sale and Purchase Agreement is signed. The buyer must pay another 8%-9% deposit to make up a 10% down payment.
Foreign purchasers are required to obtain a foreign consent from the state authorities for any property purchase, and the approval would usually take approximately about 4 to 6 weeks averagely.
The buyer has a maximum of 3 months to accomplish full payment upon receiving Foreign consent.
Generally, it shall takes approximately about 4 to 5 months to complete the sales transaction.