INFORMATION AND GUIDES FOR BUYING PROPERTY IN PENANG MALAYSIA.
Guide for buying property in Malaysia
Buying Property in Penang Malaysia. Standard procedures. How do I proceed?
Once a buyer has found and decided on a property, the next step is to understand the process for acquiring the property. The following are basic steps that a purchaser follows when buying a property in Malaysia:
Step 1
Purchaser pays an earnest deposit of 2% of PURCHASE PRICE upon signing of the letter of offer (Intent to purchase). After the seller signed the Letter of Intent and accept this deposit, he cannot sell the said property to any other party. This 2% will become part of the 10% deposit after the legal Sales & Purchase Agreement is signed.
Step 2
The Sale and Purchase Agreement (SPA) to be drawn up by the solicitor and executed by both parties within 21 days from the date of the letter of offer. Upon signing of SPA, purchaser pays 8% Purchase Price being the balance of 10% of the sale price. (The purchaser then proceed to apply for the bank financing, if required).
Step 3
Pay 90% of the remaining PURCHASE PRICE within the next 3 months from the signing date of the SALE and PURCHASE agreement. An extension of 30 days is allowed, subject to an interest of 5 % per annum on the balance sum.
If, at the time of sale, the house is still charged or assigned to a bank of financial institution for the loan granted to assist the purchase of the same, a redemption statement stating the amount due needs to be obtained from the financier concerned. Usually, the redemption of the house is incorporated into the sale and purchase agreement so that part of the proceeds from the sale will be utilized for that purpose.
Step 4
Take possession of property upon full payment and handover of keys.
In Malaysia for developer project sales or property which is under construction, there is a progress payment schedule ( Pay in stages ).
In a nutshell - To summerise
1 - Sign a purchase / sale contract with the seller (vendor)
2 - Deposit funds in an escrow with the lawyer and title search is performed by the acting lawyer firm
3 - Execution of Transfer Deed and / or Mortgage Deed and disburse funds.
4 - The solicitor proceed to register the new owner with the Public Registry ( Land office Registry in Penang / Malaysia).
Note: In Penang, all highrise apartment "condo rules" do not allow pets dog, cat, etc. If you really need to move in with your family dog, then you have to be aware of the management rules. If there are compliant, you will have to relocate your pet, so it is advisable to look consider a landed residential house if you plan to keep a pet.
The By-laws of the Strata Title Act state that a parcel proprietor is not allowed to keep any animal in his parcel or on the common property which may cause annoyance to any other proprietor.
Once a buyer has found and decided on a property, the next step is to understand the process for acquiring the property. The following are basic steps that a purchaser follows when buying a property in Malaysia:
Step 1
Purchaser pays an earnest deposit of 2% of PURCHASE PRICE upon signing of the letter of offer (Intent to purchase). After the seller signed the Letter of Intent and accept this deposit, he cannot sell the said property to any other party. This 2% will become part of the 10% deposit after the legal Sales & Purchase Agreement is signed.
Step 2
The Sale and Purchase Agreement (SPA) to be drawn up by the solicitor and executed by both parties within 21 days from the date of the letter of offer. Upon signing of SPA, purchaser pays 8% Purchase Price being the balance of 10% of the sale price. (The purchaser then proceed to apply for the bank financing, if required).
Step 3
Pay 90% of the remaining PURCHASE PRICE within the next 3 months from the signing date of the SALE and PURCHASE agreement. An extension of 30 days is allowed, subject to an interest of 5 % per annum on the balance sum.
If, at the time of sale, the house is still charged or assigned to a bank of financial institution for the loan granted to assist the purchase of the same, a redemption statement stating the amount due needs to be obtained from the financier concerned. Usually, the redemption of the house is incorporated into the sale and purchase agreement so that part of the proceeds from the sale will be utilized for that purpose.
Step 4
Take possession of property upon full payment and handover of keys.
In Malaysia for developer project sales or property which is under construction, there is a progress payment schedule ( Pay in stages ).
In a nutshell - To summerise
1 - Sign a purchase / sale contract with the seller (vendor)
2 - Deposit funds in an escrow with the lawyer and title search is performed by the acting lawyer firm
3 - Execution of Transfer Deed and / or Mortgage Deed and disburse funds.
4 - The solicitor proceed to register the new owner with the Public Registry ( Land office Registry in Penang / Malaysia).
Note: In Penang, all highrise apartment "condo rules" do not allow pets dog, cat, etc. If you really need to move in with your family dog, then you have to be aware of the management rules. If there are compliant, you will have to relocate your pet, so it is advisable to look consider a landed residential house if you plan to keep a pet.
The By-laws of the Strata Title Act state that a parcel proprietor is not allowed to keep any animal in his parcel or on the common property which may cause annoyance to any other proprietor.
IMPORTANT POINTS FOR FOREIGNER BEFORE BUYING A PROPERTY IN PENANG MALAYSIA
Penang State ruling for foreigner purchaser buying property in Malaysia.
Requirement by Penang state consent approval. The minimum floor prices of property foreigners are required to buy is RM1 million and above. It means that foreigners will only be allowed to buy condo priced above RM1 million and landed properties RM2 million and above.
However, MM2H participants can buy up to 2 units minimium price of RM500,000 for Penang (with good reason & letter of support from the Tourism Ministry). Learn more Malaysia my second home program.
For foreign purchaser, the buyer will need to apply state consent and pay 1.5% to 3% levy fee based on the purchase price after signing the sales and purchase agreement. It normally takes 6 weeks to 8 weeks for the state approval consent.
Requirement by Penang state consent approval. The minimum floor prices of property foreigners are required to buy is RM1 million and above. It means that foreigners will only be allowed to buy condo priced above RM1 million and landed properties RM2 million and above.
However, MM2H participants can buy up to 2 units minimium price of RM500,000 for Penang (with good reason & letter of support from the Tourism Ministry). Learn more Malaysia my second home program.
For foreign purchaser, the buyer will need to apply state consent and pay 1.5% to 3% levy fee based on the purchase price after signing the sales and purchase agreement. It normally takes 6 weeks to 8 weeks for the state approval consent.
Penang State ruling for foreigner purchaser buying property in Malaysia
Requirement by Penang state consent approval. The minimum floor prices of property foreigners are required to buy is RM1 million and above. It means that foreigners will only be allowed to buy condo priced above RM1 million and landed properties RM2 million and above.
However, MM2H participants can buy up to 2 units minimium price of RM500,000 for Penang (with good reason & letter of support from the Tourism Ministry). Learn more Malaysia my second home program.
For foreign purchaser, the buyer will need to apply state consent and pay 1.5% to 3% levy fee based on the purchase price after signing the sales and purchase agreement. It normally takes 6 weeks to 8 weeks for the state approval consent.
Requirement by Penang state consent approval. The minimum floor prices of property foreigners are required to buy is RM1 million and above. It means that foreigners will only be allowed to buy condo priced above RM1 million and landed properties RM2 million and above.
However, MM2H participants can buy up to 2 units minimium price of RM500,000 for Penang (with good reason & letter of support from the Tourism Ministry). Learn more Malaysia my second home program.
For foreign purchaser, the buyer will need to apply state consent and pay 1.5% to 3% levy fee based on the purchase price after signing the sales and purchase agreement. It normally takes 6 weeks to 8 weeks for the state approval consent.
The following particulars are necessary for the preparation of legal documentations:
Documents required from vendor (Seller)
If you wish us to assist or arrange a local banker or a friendly and efficient Penang lawyer to contact you, drop us a note. We will be glad to help forward you the contacts with no obligations.
- Copy of passport(s) - owner and co-owner(s), if any
- Correspondence address
- Contact - house telephone no, mobile no, office no, e-mail address
Documents required from vendor (Seller)
- Photocopies of the complete set of stamped Sale and Purchase Agreement and Deed of Mutual Covenants;
- Relevant pages of the stamped Loan Documents, i.e. Letter of Offer, Facilities Agreement, Deed of Assignment & Power of Attorney (if you have taken a loan)
- Your Loan Account number (if you have a loan) and latest bank's statement
- A photocopy of the latest assessment receipt for the year
- Latest official receipts for maintenance charges, sinking fund, quit rent, insurance and etc (Paid up to date)
- Clear copy of Strata Title (if available)
- Any other documents pertaining to the subject property
- Latest bills for water, electricity and Indah water charges, duly paid
- Inventory furniture list (if any)
If you wish us to assist or arrange a local banker or a friendly and efficient Penang lawyer to contact you, drop us a note. We will be glad to help forward you the contacts with no obligations.
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