Standard
Procedure to Buy
- Pay an earnest deposit of 3% PURCHASE PRICE upon signing of
the Letter Of Offer / acceptance.
- Pay 7% Purchase being the balance of 10% of the sale price within
14 days fromthe date of acceptance and upon signing the SALE and
PURCHASE AGREEMENT.
- Pay 90% of the remaining PURCHASE PRICE within the next 3
MONTHS from the signing date ofthe SALE and PURCHASE AGREEMENT.
- Take possession of Property upon full payment.
Standard
Procedure to Rent
- Pay 1 month of rental as the booking deposit upon signing of the Letter
Of Offer / acceptance.
- Signing of the Tenancy Agreement within the next 14 DAYS from
date of acceptance and pay TWO (2) MONTHS rental as security
deposit and 1/2 MONTH rental as utility deposit plus the
stamping fees and disbursement fees.
- Take possession of the Property.
FIC Guidelines
The guidelines
for foreigners to buy properties in Malaysia are as follows: -
- Acquisition of properties costing less than RM10 million
by Malaysian citizens is exempted from FIC approval. (Previous limit
was RM5 million limit). The intention is to facilitate and expedite
the completion of all transactions of less than RM10 million at State
Authority level
- The following property sale transactions of less than RM20 million
need only be reported to the FIC Secretariat. In such cases, State Authority
do not have to wait for FIC approval.
- Sale by Bumiputera to Bumiputera;
- Sale by non-Bumiputera to Bumiputera;
- Sale by non-Bumiputera to non-Bumiputera; and
- Sale by foreign interests to Malaysian citizens.
- Foreign interests undertaking manufacturing activities who have secured
exemption from manufacturing licenses from Ministry of International
Trade and Industry, are allowed to own industrial lots or factories
for manufacturing activities only. This is to facilitate acquisition
of industrial properties by foreigners, without equity conditions, but
for the purpose of manufacturing and not for rental.
- Further relaxation of the 22 April 1998 Special Guidelines:
- Foreigners are allowed to acquire all types of residential units,
shop houses, office space and retail space in either old or newly
launched projects costing more than RM250,000 each without having
to set up a company with local equity. (Previously foreigners were
only allowed to acquire properties in projects that had already
been completed or 50% completed.)
- Foreigners are allowed to obtain their funding for the above acquisitions
from local sources (previously funding provided by external sources).
- To encourage the establishment of headquarters or regional offices
in Malaysia, foreign companies are allowed to own offices or office
space, including for their branch offices (costing more than RM250,000
each) without any limit on the number of units they can any equity conditions.
- Foreign companies incorporated in ASEAN countries intending to set
up joint ventures or engage in trading and commercial activities in
Malaysia are allowed to own office or office space (costing more than
RM250,000) without any equity restrictions.
- Residential Properties
The latest government stimulus package announced
in June 2003 allowed foreigners to purchase residential properties valued
above RM150K instead of RM250K.
Stamp Duty
The real estate
industry is a billion ringgit industry and the Federal Government also wants
a piece of the cake. It does this in the form of stamp duty on real estate
transactions.
- Stamp Duty on Transfers
All transfers of property attract stamp duty regardless whether the
acquirer gives consideration for the transfer or not. Usually, acquirers
of property pay money for the acquisition. But sometimes the acquisition
may be way of gift.
| Value of Property |
Rate of Stamp |
| Up to RM 100,000 |
1% |
| From RM 100,001 to RM 500,000 |
2% |
| From RM 500,001 onwards |
3% |
- Stamp Duty on Charges
A charge on property is an instrument created by statue, namely the
NLC. It affords the Chargee a security for loan granted to the Chargor
over the property charged.
Stamp duty is calculated at the rate of about 0.5% of the loan amount.
- Stamp Duty on Leases and Tenancy Agreements
First, calculate the total rent for one year Then, take away RM 2,400
from that total rent, because the first RM 2,400 is free from stamp
duty.
Next, calculate the stamp duty payable based on the following table:
|
When the Lease is for a period |
|
Not exceeding one year |
Exceeding one but not exceeding 3 years |
Exceeding 3 years |
 |
|
|
|
| For every RM 250 |
1.00 |
2.00 |
4.00 |
Real Property Gains Tax
The original
purpose of the RPGT was to put a lid on property speculation. Today, it
is still the main purpose but the RPGT also serves as a useful form of revenue
for the Federal Government.
- RPGT chargeable on individuals:
|
| Category of Disposal |
Rate of Tax |
| Disposal within two years after the date of acquisition of the
chargeable asset |
30
per cent |
| Disposal in the third year after the date of acquisition of
the chargeable asset |
20
per cent |
| Disposal in the fourth year after the date of acquisition of
the chargeable asset |
15
per cent |
| Disposal in the fifth year after the date of acquisition of
the chargeable asset |
5
per cent |
| Disposal in the sixth year after the date of acquisition of
the chargeable asset or thereafter |
NIL |
- RPGT chargeable on companies:
|
| Category of Disposal |
Rate of Tax |
| Disposal within two years after the date of acquisition of the
chargeable asset |
30
per cent |
| Disposal in the third year after the date of acquisition of
the chargeable asset |
20
per cent |
| Disposal in the fourth year after the date of acquisition of
the chargeable asset |
15
per cent |
| Disposal in the fifth year after the date of acquisition of
the chargeable asset or thereafter |
5
per cent |
- RPGT chargeable on foreigners:
|
| Category of Disposal |
Rate of Tax |
| Disposal within 5 years after the date of acquisition of the
chargeable asset |
30
per cent |
| Disposal in the sixth year after the date of acquisition of
the chargeable asset or thereafter |
5
per cent |
Income Tax
Income derived
from properties, usually rent, attract income tax like any other forms
of income.
|
