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Buying Land In Johor Bahru: #1 Ultimate Guide

Posted by Joanna Tee on June 21, 2022
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When it comes to business, especially manufacturing, people prefer to have their own factory or land to run their factory. Many people think that the risk of buying land will be lower, but do you know what you look out for.

Investment opportunities are often overlooked whether you buy land for your business or investment. The yields of buying land can be high, and the value can increase over the years. You will have an opportunity to develop and rent out if you select the right location to invest.

But you may not have an idea how it works when you want to buy land in Malaysia. We will discuss some details you should note when you are buying land in Malaysia.

Buying Land Guide #1 – Can Foreigners Buy Land In Malaysia

Buying Land
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You may not know that Malaysia is one of the few Southeast Asian countries where foreigners can directly buy land. Other countries with stringent foreign ownership regulations include Thailand, Vietnam, Cambodia, and the Philippines.

Foreigners can seek approval to buy land in Singapore, but it is not as easy as in Malaysia. In Singapore, foreigners must be permanent residents for at least 5 years or have made some financial contribution to fulfilling the requirement to buy land in Singapore.

Since it would be easier to buy land in Malaysia, many foreigners tend to come to Malaysia to invest in land.

Buying Land Guide #2 – General Condition

Buying Land
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Malaysia may have a preferable foreign property ownership regulations compared to other countries, but there are certain conditions you need to know when it comes to buying land in Malaysia.

There are certain categories where foreigners are not allowed to buy the land. This includes properties that are valued below RM1 Million. Properties that are constructed on Malay Reserved land. Residential units that are low and medium-cost, which is defined by the state authorities. Properties that are allocated for Bumiputera which is also determined by the authorities in each state

Buying Land Guide #3 – Land Categories In Malaysia

Buying Land In Johor Bahru: #1 Ultimate Guide

There are a few types of land in Malaysia. You will want to decide what the purpose is with the land investment and what type of land you intend to buy. Depending on the land types, the prices will differ, and the maintenance you need to provide will also vary.

There are 4 different land types that most foreigners will be interested in, which are residential land, commercial land, agricultural land, and vacant land.

Residential Land

Residential land is mainly for building houses like Bangalow, condominiums, or apartments. More people will be looking for residential land, and the cost will be higher.

Besides, agricultural and vacant land can be converted or amalgamated into residential land, resulting in great yields. If you choo

Agricultural and vacant land can be amalgamated into residential land. There will be a great yield in results. If you choose to amalgamate, the lands will be included in the same land title, and the original title will cease. It will take more time to amalgamate land as you are not buying the end result.

Commercial land

Commercial land is for parks, businesses, or parking lot. Commercial land will be your choice if you intend to open a shop for business. If you invest in the land instead of using it for yourself, you can lease the land to a company. This will help you to bring a good rental.

If your purpose is for the usage of a project developer, you will want to confirm their credibility and history beforehand. At least work with a company with good records and complete a dozen projects. Check out their financial situation if possible. You wouldn’t want to risk getting bankrupt.

Agricultural land

When it comes to agricultural land, following the National land Code 1965, it will be hard for foreigners to purchase. Most Southeast Asian countries rely on agriculture and exports of products. The government would take protectionist measures against it. So is not allow for foreign ownership of agricultural land to prevent disturbance to the local economies and food production.

Vacant land

Vacant land will be cheaper than residential and commercial land, but there will be advantages and disadvantages. Vacant land will be easier to maintain, and you can buy a larger area than residential land.

But you will want to find a place that is going ahead in the future. It would help if you also took note that you can access utilities. It will be pointless if you buy a piece of land in the middle of nowhere, you wouldn’t be able to gain anything from the land.

Buying Land Guide #4 – Can Foreigners Get Loan For Buying Land

Buying Land In Johor Bahru: #1 Ultimate Guide
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It won’t be easy for a non-resident foreigner to get a local loan to buy land. The downpayment will be higher, even for locals who want to buy. This is because the bank considers buying land risky, especially if you are a non-resident foreigner.

Most international banks that grant overseas loans will only give it for residential properties in cities such as Japan, Australia, and the UK, for example.

Buying Land Guide #5 – Land Titles in Malaysia

Buying Land

Besides the different land types in Malaysia, you need to understand the different land titles in Malaysia. There are three different types of land titles in Malaysia. This includes a leasehold, freehold, and Bumiputera reserve.

Leasehold

The period for leasehold will last from 60 to 99 years. When the expiry time is getting closer, the land owner will need to renew the leasehold contract. The value will increase when you’ve managed to renew the leasehold contract. On the contrary, the closer the expiry date is, there will be less appreciation.

Freehold

Different from leasehold, you won’t need to renew any leasehold contract. You will be the full owner permanently if you get a freehold land title.

But any infrastructure developments, such as new railways or roads, will be prioritized over your freehold ownership. You might need to sell your property at that time.

However, developments in infrastructure (such as new railways or roads) will, maybe not surprisingly, be prioritized over your freehold ownership, meaning you might need to sell the property.

Bumiputera reserved

This is a Malaysia system that favors local Bumiputera. As a foreigner, Bumiputera reserved won’t be a good option as the approval time will be long and complicated compared to the other two titles. There will be a 15% discount for Bumiputera when buying land.

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