The Overview of Foreign Acquisition of Property in Sarawak and the Revised Market Value for Residential Property
The general rule in relation to foreign acquisition of property in Sarawak is that non-Malaysian citizens and foreign companies are only allowed to buy properties in Sarawak provided that they comply with certain requirements and restrictions imposed by the Guidelines on the Acquisition of Properties issued by the Economic Planning Unit and the Sarawak Land Code (Cap. 81) including the relevant rules and regulations that may be imposed by the State Authority.
Generally, foreigners are not allowed to acquire the following in Sarawak: -
* Residential properties under the category of low-cost and low-cost plus as determined by the State Authority
* Lands categorized as or Properties built on Native Area Land in Sarawak (whereby only native of Sarawak is entitled to acquire)
* Properties reserved for sale to bumiputera only in any property development project as determined by the State Authority (whereby only native of Sarawak is entitled to acquire)
* Vacant Lands without building
* Landed Commercial Properties
A foreign person, foreign company, foreign corporation or other foreign body may acquire an estate, interest or right in the following: -
(a) any land within Special Development (Exemption from Prohibition of Foreign Interests) Area;
(b) any of the individual parcels within a building which has been sub-divided pursuant to the Strata Titles Ordinance 1995; and
(c) any land with a building thereon for residential purpose and the market value of such land and building is not less than such amount as may be determined by the Minister by a direction published in the Gazette*.
* Pursuant to the Land (Market Value of Property for Foreign Acquisition) (Amendment) Direction, 2019 [Swk L.N.487/19 dated 28th August 2019] which comes into force on 23rd May 2019, the market value of the land with a building thereon for residential purpose (i.e. landed residential property) has increased from the initial of not less than RM350,000-00 to not less than RM600,000-00 in Kuching division and from the initial of not less than RM300,000-00 to not less than RM500,000-00 in other divisions in Sarawak. The market value thereof shall be determined by the Land & Survey Department Sarawak whom shall conduct valuation works on the said property.
A foreigner can acquire landed residential property which is still under construction (“a landed residential property under construction”) provided the following criteria are satisfied: -
(a) the State Planning Authority (SPA) has approved that the said property is for residential purpose;
(b) the foreigner is the sole purchaser of the said property;
(c) the market value thereof is not less than RM600,000-00 in Kuching division and RM500,000-00 in other divisions in Sarawak.
We are of the view that prior to the purchase of a landed residential property under construction by a foreigner, the approval from the Land and Survey Department, Sarawak is to be obtained first even if the sale and purchase price is above the said threshold amount so as to avoid any unnecessary issue or complication on the registration of the Memorandum of Transfer concerned upon the issuance of the individual title thereof at a subsequent stage.
However, the acquisition of both commercial and residential strata title properties in Sarawak by foreigners is not subject to any requirement of minimum market value and can be bought by the foreigners without any restrictions imposed as highlighted earlier.
DISCLAIMER: THE CONTENTS HEREIN ARE INTENDED FOR GENERAL INFORMATION ONLY AND NOT TO BE CONSTRUED AS LEGAL ADVICE. SHOULD YOU HAVE FURTHER QUERIES AND/OR WOULD LIKE TO HAVE THE FULL ARTICLE, KINDLY CONTACT US.
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