MM2H, Malaysia My 2nd Home, an initiative by the Government of Malaysia, was introduced in 2002 to allow foreigners to purchase property and reside in Malaysia on a long-term basis. It was temporarily frozen in August 2020 to enable the Home Ministry and the Ministry of Tourism, Arts and Culture to study and review the programme comprehensively.
The MM2H is set to be reactivated in October with iwith improvements to policies and application conditions to balance the security and economic aspects.
Home Ministry secretary-general Datuk Wan Ahmad Dahlan Abdul Aziz said new applications for the programme will be processed and managed by the Immigration Department beginning October after all legal processes are completed.
According to him, the Cabinet agreed on July 14 and 30 to the suggested improvements to new MM2H policies as a strategy to assist in the implementation of the National Recovery Plan to regenerate the country’s economy.
“The MM2H application procedures will also be improved by creating an online system for the application, processing and maintaining the profile database of MM2H participants,” he said in a media conference here today. Also present was Immigration director-general Datuk Khairul Dzaimee Daud.
Wan Ahmad Dahlan said among the improvements to the MM2H programme is the setting of a ceiling on the number of participants, namely the principals and dependants, at any one time, with not more than 1% of the total Malaysian population. The current total of MM2H participants who have been approved is 57,478 people, including dependants of MM2H pass holders. Currently Malaysia has about 30 million people. Only qualified applicants with no criminal records will be allowed to be part of the programme.
Applicants must reside in Malaysia for a cumulative of at least 90 days in a year to ensure they really spend and contribute to the country’s economy, in the form of property rentals or purchases, healthcare services, insurance, education, food and drinks as well as domestic tourism.
Speaking of property rentals or purchases in relation to MM2H holders, under the MM2H FAQ:
What Properties Can Foreigners Buy?
Given the rules vary by state, there is no single definition that covers all of Peninsular Malaysia, Sabah, and Sarawak.
It’s worth noting that Malaysia works on a federal system, so the rules in states of Peninsular Malaysia differ from those of Sabah and Sarawak, which are empowered to introduce their own ownership legislation.
While there isn’t a nationwide definition of properties you can buy, there are three important types of property that foreigners are not eligible to purchase:
- Properties built on Malay reserved land
- Properties defined as low-cost or medium-cost affordable units as defined by the state
- Properties allocated to Bumiputera groups as part of a development project
Another thing worth mentioning for foreign buyers is the particular local terminology around flats, apartments, and condos, which can sometimes catch people out if they’re not familiar with Malaysia’s property market.
Foreign Property Ownership Limits By State
If you’re looking to buy KL property, the rules are different than if you’re buying property in Sarawak. To keep you up-to-date on the latest rules, here’s a quick reference guide (for residential properties only), as well as how MM2H applies.
|State||Minimum Price||MM2H Price|
|Johor||* RM2 million (landed property in designated international zones)|
* RM1 million (high-rise/strata title property within non-international zones, except for Medini)
|Kedah||* RM600,000 (Kedah)|
* RM1 million (Langkawi)
|Malacca||* RM1 million (landed title)|
* RM500,000 (high-rise/strata title)
|* RM1 million (landed title)|
* RM500,000 (high-rise/strata title)
|Negeri Sembilan||* RM1 million (overhang landed property)|
* RM600,000 (overhang high-rise/strata title property)
|Penang||Overhang landed property: |
* RM1.8 million (island)
* RM750,000 (mainland)
Overhang strata/high-rise properties:
RM800,000 (island)/RM400,000 (mainland)
|Sabah||RM750,000 (overhang units)||RM500,000|
(Additional criteria: Foreign buyers in Selangor are limited to landed properties with landed strata titles. Foreigners cannot buy properties at auction, or own agricultural land.)
|RM2 million||* RM2 million (for Zones 1 & 2)|
* RM1 million (for Zone 3)
|Pahang, Terengganu||RM1 million||RM1 million|
|Putrajaya, Kuala Lumpur, Labuan||RM1 million||RM1 million|
There are probably a few terms that are local to Malaysia in here, so let’s pick it apart:
- Strata titles: Strata titles in Malaysia relate to properties where multiple units are built as part of a shared development with shared amenities. In most cases that means apartments or condos.
- Landed property: Means property where a unit is developed as part of a private parcel, with no shared ownership responsibility, with an individual property title. That often means a bungalow, semi-detached, or terraced house.
- Overhang: Refers to properties in Malaysia’s real estate market where supply currently outstrips demand, such as luxury condos in large developments. These will be defined by the state authorities.
As well as minimum price eligibility, states are also allowed to charge levies for foreign residential property purchases.
In Penang, the levy is currently 3%, while it is 2% in Melaka and Johor. That means for example if you buy a property for RM1 million in Johor, you’ll need to pay RM20,000 levy to the state government.
Penang, Melaka, and Johor are the only states which impose levies at the time of writing.
Breakdown of Reactivated MM2H Programme
Going back to the new MM2H programme, under the reactivated programme, participants must have an offshore income of at least RM40,000 a month compared with RM10,000 previously.
“The new income conditions are more relevant as the government is targeting high-income participants with adequate capabilities. We also consider the expenses spent on children’s education in international schools for instance, and a suitable lifestyle matching their living standards,” Wan Ahmad Dahlan said.
Applicants need to have a fixed savings account of RM1 million, compared with previous conditions of at least RM150,000 for applicants above 50 years old and RM300,000 for those 50 years old and below.
Participants also need to make an asset declaration and prove that they own liquid assets of at least RM1.5 million compared with previous conditions that set the value of liquid assets at RM350,000 and RM500,000 according to respective categories.
The MM2H programme is now divided into two categories — those between 35 and 49 years old and those who are 50 years old and above. The 35- to 49-year-old category was introduced to select participants of real quality who are more stable income-wise and have careers. This is due to changing trends and the spillover effects of programmes similar to MM2H in neighbouring countries, such as Thailand and the Philippines.
The duration of the MM2H programme long-term social visit pass is now set to five years and can be extended for another five and so on as long as participants are subject to the compliance of the application conditions, compared with 10 years previously.
The rate of the pass fee is increased to RM500 a year from RM90 previously, while a RM5,000 processing fee will be charged for the principal and RM2,500 for each dependant. “Previously, no processing fee was charged. The processing fee is aimed at increasing the quality of service offered to MM2H participants,” Wan Ahmad Dahlan said.
|FIXED SAVINGS (BELOW 50 YEARS OLD)||RM300,000||RM1 MILLION|
|FIXED SAVINGS (ABOVE 50 YEARS OLD)||RM150,000||RM1 MILLION|
|LIQUID ASSETS SAVINGS (BELOW 50 YEARS OLD)||RM500,000||RM1.5 MILLION|
|LIQUID ASSETS SAVINGS (ABOVE 50 YEARS OLD)||RM350,000||RM1.5 MILLION|
|CATEGORIES||(1) Below 50 years old, |
(2) Above 50 years old
|(1) 35 – 49 years old,|
(2) 50 years old and above
|DURATION OF MM2H PROGRAMME LONG-TERM SOCIAL VISIT PASS||10 years renewable||5 years extendable|
|RATE OF PASS FEES||(1) RM90|
(2) No processing fees
(2) RM5,000 processing fees for principal, RM2,500 processing fees for dependent
For renewal of passes, change of principals, change in nationality, participants, and dependants must undergo and pass security vetting, and submit a Letter of Good Conduct for participants and dependants, he added.
Wan Ahmad Dahlan said the implementation of new MM2H policies applies to all new applications and applications of extension for existing participants whose MM2H passes have ended or will end.
“This means existing participants, if they are still keen on joining the programme, can seek extensions subject to the new conditions.
“A grace period of a year will be given so that participants can fulfil the new requirements,” he said.
According to him, the MM2H programme managed to stimulate the country’s economy with a cumulative gross value added income of RM11.89 billion from 2002 to 2019 through visa fees, property purchases, personal vehicle purchases, fixed deposits, and monthly household expenditure.
Credits to* The Edge Markets – MM2H programme to be reactivated in Octover – home ministry
* PropertyGuru – Foreigners Buying Property In Malaysia: Your Complete Guide!
* MM2H FAQs – House Purchase