The upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link is expected to commence passenger service at the end of 2026. This RTS Link connects Woodlands North MRT Station to Johor’s Bukit Chagar station with a train journey time of about five minutes between stations. This improved accessibility has naturally renewed interest in Singaporeans buying properties in Johor Bahru.
However, as recent news reports have reminded us, there is a risk when buying uncompleted properties. An unidentified project in the Permas Jaya suburb remains under construction after almost a decade, leaving buyers without any real clarity as to when they’ll receive their keys. Even completed properties, like the ambitious Forest City mega project, have had slow starts. Government initiatives to make Forest City a “special financial zone” with tax-free incentives have made the project more attractive to homebuyers.
As property prices in Singapore increase, many would naturally be looking for alternatives. Here are five things you need to know before buying a property in Johor Bahru.
Read Also: Cost Of Living In Johor: Why It Only Makes Sense If You Are Working In Singapore
#1 Consider Applying Under The MM2H Programme
The Malaysia My Second Home programme, better known as MM2H, is a long-term visa scheme for foreigners. The requirements for the visa have gone through several iterations over the years and the latest changes were implemented last year. These include the introduction of four tiers, Silver, Gold, Platinum and a unique tier for Special Economic Zones (SEZ) and Special Financial Zones (SFZ), like Forest City.
Here are some of the criteria:
| Silver | Gold | Platinum | SEZ/SFZ | |
| Visa Duration | 10 years (renewable) | 15 years (renewable) | 20 years (renewable) | 5 years (renewable) |
| Minimum Age Of Main Applicant | 25 years old | 25 years old | 25 years old | 21 years old |
| Fixed Deposit Requirement | 150,000 USD | 500,000 USD | 1,000,000 USD | 65,000 USD (aged 21-49) 32,000 USD (aged 50 and above) |
| Participation Fee | 1,000 MYR | 3,000 MYR | 200,000 MYR | 1,000 MYR |
| Property Purchase Value | 600,000 MYR | 1,000,000 MYR | 2,000,000 MYR | 500,000 MYR (Forest City) |
Through the MM2H programme – specifically its Special Zone version – foreign buyers can obtain a renewable 10-year visa with a minimum property purchase of 500,000 MYR and a fixed deposit of US$65,000 for applicants under 50 years old, or US$32,000 for those above. The visa permits unrestricted travel in and out of Malaysia and covers dependents, including spouses, children under 34 and parents over 60.
#2 There Is A Higher Minimum Property Purchase Threshold Outside MM2H
Purchase of Johor property by foreigners (including Singaporeans) is restricted to strata units priced at least 1,000,000 MYR for strata properties. This threshold also applies to when you sell the property. Future foreign buyers will also need to meet the 1,000,000 MYR threshold (or whatever the threshold hold at the point of sale) when they buy the property from you.
Read Also: 10 Business Sectors That Will Benefit From The Johor-Singapore Special Economic Zone (JS-SEZ)
#3 As A Foreign Buyer, You Are Only Limited To Certain Property Types
While many properties in Malaysia are freehold, and there is no limit to the number of properties Singaporeans can buy, what is restricted is the type of property.
Singaporeans and other foreign buyers can buy:
- Condominium units
- Bungalows
- Terrace houses
- Semi-detached houses
- Freehold commercial properties
- Industrial properties
- Orchards/farmhouses
- Vacant land
However, we are restricted from buying:
- Land reserved for bumiputera Malaysians aka Bumi lots
- Agricultural land
- Malay Reserve Lands
#4 Know The Difference Between MOT And DOA
Two documents which every Malaysian property buyer needs to be familiar with are the Memorandum of Transfer (MOT) and Deed of Assignment (DOA). A third document, the Sale and Purchase Agreement (SPA) outlines the terms and conditions of the property transaction, but don’t reflect legal ownership of the property.
For most foreign buyers, MOT is signed at the point of sale if the title has been issued, or upon completion if it is a new launch.
There is a stamp duty imposed on the MOT, which is typically 4% for foreign buyers, since the minimum property purchase value for us is typically 1,000,000 MYR and above. This stamp duty is on top of the property price, so do make sure it’s in your budget.
In cases where the Land Title of a purchased property has not been issued, a Deed of Assignment (DOA) form is used to transfer ownership of property, and a further document recording the Developers Consent will be required.
#5 Among The Many Fees, There Are Also Costs
In addition to the stamp duty fees mentioned earlier, Malaysian properties also charge several closing costs. These are often borne by the buyer. These include:
- Real Property Gains Tax (RPGT) are a form of capital gains tax, incurred when a property is sold for profit. As a foreigner, there’s no way to avoid paying this tax, though it will get lower, the longer you hold on to the property.
- Legal fees are charged by your lawyers at a percentage of the purchase price, typically starting at 1.00%.
- Property valuation fees are needed should you be getting a housing loan from a financial institution. These are also charged at a percentage of the purchase price, typically starting from 0.25%
- Property agent commission are capped at 3% of the purchase price, though several brokers and agents will set their fees below that amount.
- Mortgage insurance in Malaysia is typically found in two formats – Mortgage Reducing Term Insurance (MRTA) and Mortgage Level Term Assurance (MLTA). MRTA is a single premium group term life insurance that pays the outstanding home loan in the event of death or permanent disability. MLTA includes a guaranteed cash value back in the event of death and permanent disability. MRTA is less costly and therefore less popular.
Read Also: 4 Financial Mistakes To Avoid When You Are In Malaysia
