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REAL ESTATE Q & A

Jan 25, 2018
REAL ESTATE Q & A
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How much can I afford?
This depends on your income and other financial obligations. As a rule of thumb, most house buyers buy houses that cost 1.5 and 2.5 times their annual income. For example a house buyer earning RM40,000 a year would buy a house between RM60,000 and RM100,000. Furthermore, the monthly loan repayment should not exceed about 1/3 of your gross monthly income. In assessing your repayment capability, the financial institution would also take into account your other debt repayments such as car loan, personal loan and credit cards.


How much can I borrow?
This will depend on the value of your property, your income and your repayment capability. Margin of financing can go as high as 95% (inclusive of MRTA). The higher the margin, the higher you will have to pay per instalment. Also, at a given rate, a shorter tenure will require you to pay higher instalment.


How long does it take to process a loan?
It usually takes about one to two weeks for your loan application to be approved from the time you supply full documentation. You should ask the financial institution for the checklist of documents required for the application to avoid any delay.


What is the difference between conventional financing and Islamic financing?
Under conventional financing, your outstanding loan consists of principal plus the interest charged on you. The interest is actually the financial institution's cost in obtaining the funds. Islamic financing works on the concept of buying and selling where the financial institution purchases the property and subsequently sells it to you above the purchase price.


Why do I need a valuation?
A valuation is required if you are buying a completed property. The financial institution requires a valuation to ascertain whether the property provides sufficient security for the loan given. It also provides an indication that the property is worth what you are paying for.


Do I need to appoint a lawyer? Can I choose my own lawyer?
Yes. You need to appoint a lawyer to draw up your loan documentation. Normally, the financial institution will provide a panel of lawyers who are familiar with their documentation requirements for you to choose from. If you prefer to engage your own lawyer, you should discuss this with your financial institution.


Who pays for the legal fees?
Generally, legal fees are borne by the buyer. However, certain developers and financial institutions may offer to pay the legal fees on the legal documentation as part of their marketing package. In addition, some financial institutions also extend financing for the loan documentation fees.


What if I run into financial difficulties and cannot meet my loan repayments?
If this happens, you should contact your financial institution to discuss a reasonable repayment program, which could include extending the tenure of the loan.


Can I pay off my loan in full earlier than the agreed loan tenure?
Normally there will be penalty charges for early loan settlement. Depending on the financial institution, penalty charges will range between 2-5% of the outstanding amount. The charges that are made will depend on the type of product you have chosen and when you decide to redeem your loan. Note that in some loan packages, there are certain minimum periods you need to observe before full settlement is allowed.


Is there any waiver of penalty fees for early loan settlement?
Any waiver of penalty fee is strictly at the discretion of the financial institution.


Why does my outstanding loan remain high at the initial stage despite the repayments made?
During the early years of the loan, a significant amount of your repayments will go towards the payment of interest. So if you make partial repayments to repay the principal sum outstanding, you make substantial savings in your interest payments and thus shorten your loan tenure.


Can I make extra payments other than the monthly contractual repayments?
This depends on the terms and conditions stated in your loan agreement. By paying in extra money each month or making an extra payment at the end of the year, you can speed up the process of paying off the loan. When you pay extra money, be sure to indicate that the excess payment is to be applied to the principal. However, if you make a lump sum payment or partial repayments to your principal loan, you must give notice to your financial institution. The notice period ranges from 1 to 3 months.


Do I need a guarantor for a loan facility?
This is at the financial institution's discretion and depends on the credit standing of the borrower.


Does the financial institution have the right to charge my loan account for any miscellaneous charges incurred by them such as late payment charges, legal costs, insurance, etc?
The financial institution's power to impose charges on your account is normally indicated in the Terms and Conditions of the loan.


How long is the grace period for payment of my monthly instalment/interest?
Generally, the financial institution gives a grace period of 7-14 days for you to repay your instalment payment. Any payment received after the grace period will be subjected to late payment charges.


When does the financial institution release the loan to the seller/developer?
For houses under construction, the financial institution will release the progressive payment to the developer based on the claim made upon completion of each construction stage as certified by the Architect's Certificate. For completed properties, the loan will be released upon completion of legal documentation or when all relevant approvals, such as the approval of the state government have been obtained.


Can I purchase a house under joint names and apply for the housing loan only under my name?
The financial institution will consider such applications on the merits of each case, under the following circumstances:
·       The co-owners are related as husband and wife, and one party is not working and the other party is solely responsible for the loan
·       The co-owners are related as father/mother and children, the parents are old and not working and the children will be responsible for the loan
However, the above is at the financial institution's discretion and they may also consider other circumstances.


If the developer abandons the project, am I still required to service my interest/instalment payments?
Yes. You are still obliged to service your loan based on the loan agreement signed between you and the financial institution. However, since the financial institution has vested interest in the property, you could discuss a repayment plan with your financial institution. You should also report the matter to the Ministry of Housing & Local Government. 


What happens when the loan is fully repaid?
When the loan is fully settled, the financial institution through its solicitors, will release its charge on the property. The financial institution (chargor) will uplift his claim on the property and the title to the property will be transferred to you.


What happens in the event of death of a borrower who has not bought insurance?
The deceased's survivor/next of kin can claim through the court the rights of the deceased's property. The person will have an option to either proceed to service the loan or redeem it. However, most financial institutions make it compulsory to insure (MRTA) against such an event.


What can the financial institution do if I do not make repayments?
If you fail to make three consecutive payments, the financial institution will take the necessary actions to recall the loan. In the worst case scenario, the financial institution will foreclose the property and sell it to settle the loan. The borrower would still be liable to pay the difference between the auction price and the loan amount outstanding.


What is the most convenient way to repay my loan?
Financial institutions offer a wide range of services to make banking easier for you. Some of the alternative ways of servicing a loan include:
·       Open a savings/current account and arrange for standing instructions with minimal charges (if you maintain deposit and loan accounts with the same bank, the charges may be waived)
·       Through an ATM transfer
·       Internet Banking
·       Telephone banking service
·       Deposit your cheque at the deposit machine or send your cheques direct to your financial institution


Should I consider refinancing my loan if I am offered a lower interest rate?
The main consideration in refinancing would be the costs involved. As you are clearly aware, you have incurred a substantial amount to pay for the necessary fees to obtain your first loan. For example, processing fees, legal fees, stamping and transfer fees. Refinancing means you would have to incur the same charges again. Before you decide to refinance, you should ensure that the savings from the lower interest rate is enough to compensate all the costs incurred associated with refinancing, including penalty charges, if any.


Source by:
Bankinginfo
Persatuan Bank Bank Dalam Malaysia
Bank Negara Malaysia

BOVAEA TO EDUCATE BUYERS ON THE PROPERTY MARKET

Nov 29, 2017
BOVAEA TO EDUCATE BUYERS ON THE PROPERTY MARKET
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BOVAEA TO EDUCATE BUYERS ON THE PROPERTY MARKET

WITHDRAWAL REQUIREMENTS

Nov 29, 2017
WITHDRAWAL REQUIREMENTS
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WITHDRAWAL REQUIREMENTS

 


MM2H participants are allowed to withdraw partial of the required Fixed Deposit from the second year onwards (RM50,000 for aged 50 years and above) / (RM150,000 for aged 50 years and below) for approved expenses related to house purchase, car purchase, education for children in Malaysia and medical purposes. They have to maintain the balanced RM100,000 (for aged 50 years and above) / RM150,000 (for aged 50 years and below) of Fixed Deposit until they terminate from MM2H Programme.

The documents required for Fixed Deposit Withdrawal are:

  • Letter of intention to withdraw Fixed Deposit account
  • Copy of MM2H visa
  • Copy of front page passport
  • Copy of Fixed Deposit certificate
  • Copy proof of payment for Residential property purchase (to submit of all pages of Sales & Purchase Agreement & receipt), Car purchase (to submit car grant title & receipt), Children’s education in Malaysia (to submit receipt), Medical expenses (to submit receipt)
  • Copy of Conditional Approval Letter

Please be advised that the withdrawal is on a reimbursement basis and release of money will be made based on the amount paid.

Withdrawal can be made after the first year, effective from date of MM2H social visit pass endorsement in the passport.

If applicant wishes to withdraw the interest accrued on savings, please indicate in the letter of intention
** The processing and approval process will take three (3) working days from the date of
submission of the application (provided the documentation is complete )
 

Important Note: 
All copies must be certified TRUE COPIES OF ORIGINAL DOCUMENTS by EMBASSY / HIGH COMMISSION / NOTARY PUBLIC / GOVERNMENT OFFICIAL / SOLICITOR / ADVOCATE / AUDITOR FROM ORIGIN COUNTRY.

sources: http://www.mm2h.gov.my


 

PURCHASE A HOUSE

Nov 29, 2017
PURCHASE A HOUSE
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PURCHASE A HOUSE

Please be informed that property purchase is not a pre-requisite for participating in MM2H programme.

Any foreigner may purchase any number of residential property in Malaysia, subject to the minimum price established for foreigners by the different states. They start from RM500,000 per unit for most states, from 1st Mac 2014. Land is a state matter and it is important to check state laws before making any commitment, as the minimum purchase price is not standardized between states.

We advise buying homes which are already issued with certificates of fitness but if you intend to purchase from developers, esnure that it is from a reputable company.

Profits made on the sale of property is subjected to current Real Property Gains Tax rate set by the Government of Malaysia.

1st year - 5 th year : 30%
6th year and above : 5%

Important Note : BRINGING IN PERSONAL BELONGINGS

Please note that certain items require a permit/license before the participants can be imported into Malaysia. For further details, you may visit Custom's website at www.customs.gov.my on restricted importation of items/goods.

For further enquiries, please contact the following details as below :

Head Office
Royal Customs Malaysia
Kompleks Kementerian Kewangan
No 3, Persiaran Perdana, Presint 2,
62596 Putrajaya,
Malaysia.
Tel : +603-8882 2100/2300/2500
Call Center : +603-7806 7200
Hotline : +603-8882 2111/2222
Website : www.customs.gov.my


Sources: http://www.mm2h.gov.my

WHY CHOOSE MALAYSIA

Nov 29, 2017
WHY CHOOSE MALAYSIA
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WHY CHOOSE MALAYSIA


GOVERNMENT SUPPORT

This programme is initiated, organised and launched by the Malaysian Government and is thus one that the Government will continuously seek to improve, to ensure its success.
 

CULTURE & LANGUAGE

The Malay language (Bahasa Melayu) is the national language of the country; English is the second language but other languages can be freely used and practised. Similarly the Malay culture is dominant in the country because the Malays are the dominant race in Malaysia and in the region. But other cultures can be practiced very freely and there is a free intermingling of different cultures.

 

RECREATION & ENTERTAINMENT

The country has everything for the family,-theme parks, jungle trails,sports, water sports and one of the highest numbers of golf courses.

 

WEATHER

The country has everything for the family,-theme parks, jungle trails,sports, water sports and one of the highest numbers of golf courses.

 

FOOD & FRUITS

International cuisine is available here at very reasonable cost. With so many races and cultures living together in harmony, it is understandable that each race has picked up the best of each other’s food and made Malaysia into Asia’s Food Paradise.

Similarly the tropical fruits of Malaysia are unique, exotic and available in abundance practically throughout the year. It should be a real joy to savour these fruits.

 

SHOPPING

From high-end couture to ethnic handicrafts and the internationally acclaimed pewter ware, Malaysia has it all. Enjoy the comforts and convenience of shopping in air-conditioned malls and hypermarkets. Besides shopping, families have a choice of watching a movie, having fun at the bowling alley or enjoying the spread at the food court. Shoppers can also browse for interesting curios on display at the weekly flea markets. Join in the excitement of haggling at the night markets, an interesting feature of local life. The best time to enjoy fantastic discounts and special offers is during the annual Mega Sales.

sources: http://www.mm2h.gov.my

PURCHASE OR IMPORT A CAR : ANNOUNCEMENT FOR TAX INCENTIVE UNDER MM2H PROGRAMME

Nov 29, 2017
PURCHASE OR IMPORT A CAR : ANNOUNCEMENT FOR TAX INCENTIVE UNDER MM2H PROGRAMME
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PURCHASE OR IMPORT A CAR


ANNOUNCEMENT FOR TAX INCENTIVE UNDER MM2H PROGRAMME

The Goverment has decided to abolish the tax incentive on the purchase of a new locally assembled vehicle or the import of a pre-owned private vehicle into Malaysia under MM2H Programme. Therefore, this tax incentive will be terminated effective from 1 January 2018. However, Ministry of Finance will give special consideration to MM2H participant with first MM2H’s Visa approved beginning 1 January 2017 until 31 December 2017 to submit complete application via Sistem Maklumat Pengurusan Cukai / Sistem Maklumat Pengurusan Cukai Kerajaan Malaysia not later than 31 December 2018.

TAX INCENTIVE UNDER MM2H PROGRAMME 

An approved participant under the MM2H Programme, with first MM2H’s Visa approved from 1 January 2017 until 31 December 2017, is eligible for:

(i) Exemption of excise duty to purchase a new locally assembled vehicle (Completely Knocked-Down -CKD); OR

(ii) Exemption of import duty and excise duty to import a pre-owned private vehicle (Completely Built-Up - CBU) into Malaysia.

TERMS AND CONDITIONS 

An approved MM2H participant is eligible to enjoy this incentive, limited to RM150,000, for purchasing a new locally assembled vehicle (CKD) OR for importing a pre-owned private vehicle (CBU). This incentive is subject to the following terms and conditions as below: 

1) The total value of exemption for excise duty to purchase a new locally assembled vehicle (CKD) is limited to RM150,000 OR the total value of exemption for import duty and excise duty exemption is limited to RM150,000 for importing a pre-owned private vehicle (CBU).

2) The application to purchase a new locally assembled vehicle (CKD) OR to import a pre-owned private vehicle (CBU) shall be made not later than 31 December 2018. If a participant fails to apply for the duty exemption within the stipulated period, no further extension will be provided.

3) For the purchase of a new locally assembled vehicle (CKD):

     i. the vehicle shall be obtained from the new stock of vehicles which have not been registered and duties have not been paid; and

     ii. the chassis number and engine number needs to be submitted during application. 

4) For importing a pre-owned private vehicle (CBU):

     i. the vehicle shall be pre-owned for at least thirty-six (36) months by the MM2H applicant before the commencement of the MM2H visa; and

     ii. the vehicle shall be imported from the country of origin or last domicile country of the MM2H applicant. 

5) A MM2H participant who has obtained duty exemption approval for the vehicle shall submit the approval letter to the Royal Malaysian Customs Department to obtain   the duty exemption and to the Road Transport Department for the registration of the vehicle. 

6) The approved vehicle shall be directly used by the MM2H participant for personal use only, while in Malaysia. 

7) Each MM2H participant is entitled to enjoy the duty exemption for only one unit of   vehicle. The types of vehicles entitled under this incentive are saloon cars, MultiPurpose Vehicles (MPV), Sports Utility Vehicles (SUV) and Four-Wheel Drive (4WD) vehicles only. 

8) Commercial vehicles such as lorries, vans, buses, limousines and other types of vehicles are not eligible for this tax incentive. 

9) The approved MM2H participant shall reside and have a permanent address in Malaysia. A copy of the proof of purchase (Sales and Purchase Agreement); or   rental residence (Tenancy Agreement); is required to be submitted for each application. 

10) An MM2H participant is only allowed to sell/transfer ownership of the exempted vehicle after five (5) years from the date of registration of the vehicle with the    consent of the Royal Malaysian Customs Department. The duties, based on the  current evaluation determined by the Royal Malaysian Customs Department, need   to be paid before the transfer of ownership takes place. 

11) Any breach of the above conditions shall lead to the revocation of this incentive and the MM2H participant shall be required to refund to the Government of Malaysia, the amount of duties exempted for the said vehicle. 

12) The application of participants will be rejected if they failed to comply with the said terms and conditions. 

  • PROCEDURE TO PURCHASE A NEW LOCALLY ASSEMBLED VEHICLE (CKD)

The supporting documents needed to obtain approval for exemption of excise duty that is limited to RM150,000 for the purchase of a new locally assembled vehicle (CKD) is as follows:

1) A copy of MM2H approval letter from Immigration Department of Malaysia;

2) A copy of MM2H participant’s international passport (pages that display the identity of the applicant);

3) A copy of MM2H participant’s international passport (pages that display clearly the multiple entry visa and MM2H visa);

4) A copy of the purchase order under MM2H applicant’s name from the vehicle dealer;

5) Submission of chassis number and engine number of vehicle during application;

6) A copy of quotation, detailing the price, from the vehicle dealer;

7) A copy of the fixed deposit statement, bank statement and 3 month of salary slips;

8) A complete copy of Sales and Purchase (S&P) or Tenancy Agreement in Malaysia under the applicant’s name; and

9) For representative/agent on behalf of MM2H applicant, a copy of license/permit approved from the Ministry Tourism and Culture of Malaysia or letter of    authorization from MM2H applicant must be submitted together during application

  • PROCEDURE TO IMPORT A PRE-OWNED PRIVATE VEHICLE (CBU) INTO MALAYSIA.
The supporting documents needed to obtain approval for exemption of import duty and excise duty that is limited to RM150,000 for the importation of a pre-owned private vehicle (CBU) into Malaysia is as follows:

1) A copy of MM2H approval letter from Immigration Department of Malaysia;

2) A copy of MM2H participant’s international passport (pages that display the identity of the applicant);

3) A copy of MM2H participant’s international passport (pages that display clearly the multiple entry visa and MM2H visa);

4) A copy of the vehicle registration card (to provide an English translation for
   information that is in a foreign language);

5) A copy of approval letter for the Approved Permit (AP) to import the vehicle, from the Ministry of International Trade and Industry (MITI);

6) A copy of the fixed deposit statement, bank statement and 3 month salary slips;

7) A complete copy of the Sales and Purchase (S&P) or Tenancy Agreement in Malaysia under the applicant’s name; and 

8) Representative/agent on behalf of MM2H applicant, a copy of license/permit approved from Ministry Tourism and Culture of Malaysia or letter of authorization   from MM2H applicant must be submitted together during application.

The Ministry of Finance, from time to time, is entitled to request additional information, depending on the submission of the application. All documents mentioned above shall be signed and certified by Malaysian Government officers or the Commissioner of Oaths before being scanned and uploaded into the online system.

This duty exemption incentive application should be submitted online via http://smpc.treasury.gov.my  Applicants are required to obtain an ID and password in www.digicert.com.my  with a fee. If the application is made through agents / representatives, the agents / representatives needs to obtain an ID and password for the applicant and attach a copy of the applicant's identity card and the authorization letter from the applicant. 

For further guidelines, please refer link below: 

Guideline for Tax Incentive 

Prosedur Pengecualian Cukai


ADDRESS AND CONTACT PERSON INCHARGE 

Any enquiries please contact:

1. Ms. A'ina Iryani Binti Dol Razlan
Tel :+603 8882 4059
Email : aina.razlan@treasury.gov.my 

2. Mrs. Nurul Naimah Binti Salim 
    Tel :+603-8882 3269 
    Email : naimah.salim@treasury.gov.my 

For technical and online issues please contact: 
3. Mr. Nur Arief Mohd Amin
   Tel :+6603 8890 6588 
   Email : nurarief.mohdamin@treasury.gov.my 

Contact us at: 

Tax Division Ministry of Finance Malaysia 
7th Floor, Centre Block Presint 2, 
Federal Government Administrative Centre 
62592 Wilayah Persekutuan Putrajaya 
(attn: Ms. A'ina Iryani Binti Dol Razlan) 

Processing will take 14 working days upon submission of complete documents into the system. 

OFFICE HOURS

Monday to Friday :
8.30 am to 4.30 pm 

Lunch break : 
1.00 pm to 2.00 pm (Monday to Thursday) 
12.15 pm to 2.45 pm (Friday) 

Office is closed on Saturday, Sunday and public holidays.

sources: http://www.mm2h.gov.my

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