There are many foreigners
to enquire can they be allowed to acquire property in Penang ? Hope this report
is helping.
(With effective from 1st
April 2014)
Federal Terms For Foreign Acquisition
All property acquisition
above RM20Mil (Expect residential units), requires approval of the EPU
(Economic Planning Unit), Prime Minister’s Department.
The following are the
terms of the property acquisitions by foreign interest that do not require the
approval of EPU
a) Acquisition of
commercial unit valued at RM1Mil and above ;
b) Acquisiton of
agricultural land valued at RM1Mil and above or at least five (5) acres in area
for the specific purposes ;
c) Acquisition of
industrial land valued RM1Mil and above ;
d) Transfer of property to
a foreigner based on family ties is only allowed among immediate family member
;
d) Acquisition of
residential unit valued at RM1Mil and above. But falls under the purview of the State Authorities. ;
Foreign interest is NOT ALLOWED to acquire :
a) Properties valued less
than RM1Mil per unit ;
b) Residential units under
the category of low and low-medium cost as determined by the State Authority ;
c) Properties built on
Malay reserved land ;
d) Properties allocated to
Bumiputera interest in any property development project as determined by the
State Authority.
In
short, base on the Federal Government’s act foreigners are allowed to buy
property above RM1Mil regardless residential, commercial or industrial purpose.
Exception not low or low-medium cost category and not involved in Malay
Bumiputera interest.
State
Government Terms For Foreign Acquisition
However,
the foreign property acquisition is still subject to the State Government. In
this case, Penang Government has implemented min of RM2Mil acquisition price to
all landed property and RM1Mil to all high rise property in Penang Island. And
RM1Mil min to landed houses in mainland.
But
if you possess MM2H (Malaysia My 2nd Home) status, Penang Government
allows foreigners to buy 2 units only min RM500K residential unit
Taxes
All
foreign property acquisition has to pay 3% levy tax on the transaction price, except
those buying for industrial purpose.
Both
local and foreign sellers are to pay a 2% levy tax if they sell the property
within 3 years (Acquired after 1st February 2014)
As
for RPGT (Real Property Gains Tax), please refer to the following chart ;
As per Schedule 4 of the Real Property Gains Tax Act 1976 individual can obtain RPGT exemption base on the following ;
a) Disposal of one residential property once in a lifetime
b) Transfer as gifts in between family members. This exemption is only applicable for transfer in between husband and wife, parent and children, grandparent and grandchildren. Take notes that transfer between sibling, brothers or sister are not applicable.
c) Waiver Exemption equivalent to 10% chargeable gains or RM10K whichever is higher is not taxable.
Others
Joined ownership with local or to form company with local interest.
You can join name with local people to purchase Penang property such as 50/50 share. In this case only 50% foreign share of the property is liable to rules and regulations. For instance, if your price of the property is RM5Mil, then 50% of the property share @ RM2.5Mil is liable to 3% levy tax.
You can form a company with local interest to purchase, but the foreigner share is limited up to max 49% considered as local interest. 50% and above is considered as foreign interest.
Others
Joined ownership with local or to form company with local interest.
You can join name with local people to purchase Penang property such as 50/50 share. In this case only 50% foreign share of the property is liable to rules and regulations. For instance, if your price of the property is RM5Mil, then 50% of the property share @ RM2.5Mil is liable to 3% levy tax.
You can form a company with local interest to purchase, but the foreigner share is limited up to max 49% considered as local interest. 50% and above is considered as foreign interest.
