Relaxation on foreign purchase and abolishment of gains tax
Malaysia’s real estate sector is poised for vibrant growth and brighter outlook ahead following the recent two landmark measures announced by the Malaysian government; a) Relaxation of FIC ruling for foreign nationals to acquire properties in Malaysia after 21st December 2006 and b) abolishment of Real Property Gains Tax (RPGT), effective 1st April 2007.
Foreign nationals are allowed to buy residential properties worth more than RM250,000 per unit without the need of getting approval from the Foreign Investment Committee (FIC) of the Economic Planning Unit in the Prime Minister’s Department.
Malaysia’s property practitioners welcome the moves as it will promote a more active and vibrant property market. ACCCIM Hails Abolition Of RPGT whilst REHDA applauded the move that abolition of RPGT will spur the property market. It is expected to encourage more foreign investors to buy high end residential units in well-located areas of Klang Valley, Penang and Johor and attract more foreign nationals to sign up for MM2H programmes.
Though FIC approval is no longer needed, foreign nationals who wish to purchase properties in Malaysia are subject to application for consent of transfer of ownership to the relevant state’s land office or Land and Mines office and payment of application fees which varies for each state. As for Penang State, foreign buyers of Penang Properties are required to pay application fees ie RM1,000 for individuals or RM2,000 for companies within 30 days upon receiving approval. Verbal enquires with the Penang State Land and Mines Office as at 29th March 2007 revealed that the guidelines and application procedures for acquisition of Penang Properties by Foreign Nationals posted at the Penang State government’s website on 1st December 2005 is still applicable. Related link at relaxed rules boon for builders.
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