The 4% stamp duty imposed on foreign property buyers in Malaysia could potentially offset the positive impact of the relaxation of conditions for the Malaysia My Second Home (MM2H) program, according to Maybank Investment Bank.
Maybank Investment Bank’s research noted that while the eased MM2H conditions are expected to benefit the domestic property industry, the introduction of a flat 4% stamp duty on foreign buyers could significantly increase stamp duty fees for properties priced at RM1.1 million per unit, resulting in a potential 63% increase.
During the announcement of Budget 2024, Prime Minister Anwar Ibrahim highlighted the government’s decision to relax MM2H application conditions. This move is anticipated to stimulate investment activities in the Malaysian financial market and the country’s real estate industry.
In response to the stamp duty issue, the Real Estate and Housing Developers’ Association (REHDA) Malaysia also expressed concerns. They cited plans to introduce a 4% flat rate for stamp duty on memorandum of transfers for purchases by foreign individuals and companies. Although foreign ownership in Malaysia is currently negligible, REHDA Malaysia believes this proposal may discourage homeownership and potential future MM2H participants considering migration to Malaysia.
The impact of the 4% stamp duty on foreign property buyers will likely be closely monitored as the government’s measures to attract investment and stimulate the property market unfold.