The revised guidelines for the Malaysia My Second Home (MM2H) programme have generally been welcomed by agents, though concerns remain about the mandatory property purchase requirement. These new conditions, announced by the tourism, arts and culture ministry (Motac), aim to stimulate the high-end property market while attracting genuinely interested participants.
Balancing Benefits and Concerns
Positive Impact on High-End Property Market
The revised MM2H guidelines are expected to rejuvenate the high-end property market in Malaysia. With clear conditions and requirements, developers now have better visibility of the market, which could lead to more property launches in the high-end residential segment.
Jaime Chiew, managing director of an MM2H consultancy, noted that while the mandatory property purchase and 10-year holding period may seem restrictive, they also signify a larger financial commitment to Malaysia. This commitment is likely to increase investment and contribute positively to the economy.
Concerns Over Financial Commitments
Despite the potential benefits, there are concerns about the mandatory property purchase for MM2H holders, especially those in the Silver tier. Chiew highlighted that this requirement could be a significant financial burden for applicants with a five-year visa validity period, potentially restricting their ability to sell the property quickly if circumstances change.
“Purchasing property signifies a bigger financial commitment to Malaysia, potentially leading to increased investment and contribution to the economy. It may also discourage applicants seeking the programme’s temporary benefits,” Chiew said.
Anthony Liew, president of the MM2H Consultants Association, echoed these concerns, suggesting that a lower fixed deposit requirement might ease the financial burden on MM2H holders. He also pointed out that some participants might prefer renting initially before deciding on a property purchase.
Stimulating Genuine Interest
The mandatory home ownership requirement is seen as a way to ensure that MM2H applicants are genuinely interested in long-term investment in Malaysia. This requirement acts as an automatic filter, attracting participants who are committed to investing in the country’s property market rather than those seeking temporary benefits.
New Tiers and Requirements
The updated MM2H programme includes three tiers – Platinum, Gold, and Silver – based on the applicant’s financial standing. Each tier comes with specific requirements for property purchase:
- Platinum Tier: Minimum property purchase value of RM2 million.
- Gold Tier: Minimum property purchase value of RM1 million.
- Silver Tier: Minimum property purchase value of RM600,000.
Participants are required to hold the property for a minimum of 10 years, although they can upgrade to higher-valued homes during this period.
Regional Appeal
Real estate industry veteran K. Soma Sundram noted that areas like the Klang Valley, Penang, Johor, and Perak could see increased interest from MM2H participants. These regions offer a mix of vibrant city centers and quieter areas for relaxation, catering to a diverse range of preferences among potential applicants.
Future Engagement and Adjustments
Liew also expressed hope that the ministry would consider further relaxing some of the fixed deposit and home ownership conditions. He suggested that ongoing engagement with the ministry could help consultants understand the rationale behind the guidelines and offer constructive feedback.
“This allows us to understand the reasoning behind the current guidelines, where we can propose our views as well,” Liew said.
Conclusion
The revised MM2H guidelines are poised to significantly impact Malaysia’s high-end property sector. While concerns about the mandatory home ownership requirement persist, the overall response from agents and industry experts has been positive. The new conditions are expected to drive property sales, attract genuinely interested participants, and contribute to the broader economy. With continued dialogue and potential adjustments, the MM2H programme could further enhance its appeal and effectiveness, ensuring sustained growth in Malaysia’s property market.
