Kota Kinabalu

πŸ“œ

Buying Property

Sections

1. Types of Properties Available

In Kota Kinabalu, you can find a variety of property types, including:

  • Residential Properties:

    • Condos/Apartments: Popular among expatriates and locals, often found in urban areas.
    • Terrace Houses: Common in suburban areas, suitable for families.
    • Semi-Detached and Detached Houses: More spacious options, typically in quieter neighborhoods.
    • Landed Properties: Includes bungalows and villas, often with gardens.

  • Commercial Properties:

    • Retail Spaces: Shops and storefronts in commercial districts.
    • Office Spaces: Available in business hubs, suitable for businesses and startups.
    • Industrial Properties: Warehouses and factories located in industrial zones.

2. Costs

  • Property Prices:
    • Prices vary significantly based on location, type, and size. As of 2023, average prices for condos range from RM 300,000 to RM 1,000,000, while landed properties can start from RM 500,000 and go up to several million RM for luxury homes.
  • Additional Costs:
    • Legal Fees: Typically 1% to 2% of the property price.
    • Stamp Duty: Ranges from 1% to 4% based on the property value.
    • Real Estate Agent Fees: Usually around 2% to 3% of the sale price.

3. Legal Procedures

  • Eligibility: Foreigners can purchase property in Malaysia, but there are certain restrictions (see below).

  • Process:

    1. Find a Property: Engage a real estate agent or search online listings.
    2. Letter of Offer: Submit a letter of offer to the seller.
    3. Sale and Purchase Agreement (SPA): Once the offer is accepted, both parties sign the SPA, usually within 14 days.
    4. Deposit: Pay a deposit (typically 10% of the purchase price).
    5. Legal Checks: Conduct due diligence, including land title checks.
    6. Completion: Finalize the sale, pay the remaining balance, and transfer ownership.

4. Restrictions for Foreigners

  • Foreigners can buy property in Malaysia, but:
    • Minimum purchase price for residential properties is RM 1 million (varies by state).
    • Foreigners are generally restricted from purchasing properties in certain categories, such as low-cost housing.
    • Approval from the Foreign Investment Committee (FIC) may be required for certain transactions.

5. Taxes

  • Property Tax: Annual property tax (cukai pintu) is based on the assessed value of the property.
  • Capital Gains Tax: If you sell the property within five years, a 30% tax applies on profits. This decreases to 20% for sales in the sixth year and 10% in the seventh year onward.
  • Income Tax: If you rent out the property, rental income is subject to income tax.

6. Financing Options

  • Bank Loans: Most banks in Malaysia offer financing for property purchases. Foreigners may be eligible for loans, typically up to 70% of the property value.
  • Documentation Required: Proof of income, employment, and identification documents.
  • Interest Rates: Generally range from 3% to 5% per annum.

7. Local Considerations and Cultural Factors

  • Cultural Sensitivity: Malaysia is a multicultural country. Understanding local customs and practices is essential, especially in negotiations and community interactions.
  • Community Living: Many neighborhoods have a strong sense of community. Engaging with neighbors can enhance your living experience.
  • Language: While English is widely spoken, learning basic Malay phrases can be beneficial.

8. Property Market Trends

  • Market Overview: The property market in Kota Kinabalu has seen fluctuations, with a recent trend towards more affordable housing options due to economic factors.
  • Investment Potential: Areas near the waterfront and city center are popular for investment, while suburban areas are growing due to new developments.
  • Future Developments: Keep an eye on government initiatives and infrastructure projects that may influence property values.

9. Recommended Neighborhoods

  • Likas: Known for its scenic views and proximity to the city center.
  • Tanjung Aru: Popular for its beaches and family-friendly environment.
  • Kota Kinabalu City Center: Ideal for those seeking urban living with access to amenities.
  • Inanam: A growing suburb with more affordable housing options.

Conclusion

Buying property in Kota Kinabalu can be a rewarding investment, but it’s essential to understand the local market, legal requirements, and cultural nuances. Engaging with local real estate professionals and legal advisors can help navigate the process smoothly. Always conduct thorough research and consider your long-term goals when investing in property.