Is State approval needed for MM2H land purchase

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We are in the process of buying land on which we will then build our new home.

Our lawyer is carrying out the process for purchase for us.

He has told us that, as foreigners,  we must apply to the State for its approval that we can buy the land. This application process takes up to 3 months.  If their approval is forthcoming, and usually it is (apparently they check to see if too many foreigners are in that particular locale) they will then charge us for the approval.  This is a charge made up for an application fee of about 1000RM PLUS a charge based on the size of the land.  The lawyer says that any land over 8000Sq ft that the State approves carries a surcharge of 10% of the price paid.  For example buying 10,000 Sq Ft at say 20RM per square foot means they would levy a charge of 2000 x 20 x 10% = 4000 RM

Has anyone else come across this?

We have been told by another expat that  as MM2H 'ers this is not the case, but then they have not bought any land.

Does anyone have experience of this or can suggest where I might seek clarification?

Thanks

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hi, Sag,

You may like to look at the thread : FIC/State Tax

This is for property transfer, not specifically land, but it applies with MM2H. So MM2H doesn't mean that state approval is waived. I imagine it's the same with land. However, 10% seems a bit steep. Perhaps some other members have experience of this, otherwise have you tried alloexpat MM2H board under the "how to buy property" thread.

regards, Scott

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It looks like it varies from state to state, sag. Yes, we needed approval for our bungalow purchase in Johor as well. But it seemed to be a standard RM10,000 fee (for a property of RM1.5mil) and we got our approval in 14 days!

Karen

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Hi there

Yes we have now found that in Melaka state there is a 1000RM application fee, then you pay 10% of the purchase price on the proportion of land area over 8000Sq Ft.  So buying 10000Sq Ft = 10% fee on 20% of the purcgase price.

A tidy way for local government to stitch up MM2Hers!  And not mentioned in any MM2H information given out by the government

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Same at Penang... had to pay RM1000 +50 for "state consent" which I still could agree with, but the top was, that the application for that had to be handled by the notary and for that letter they charged another RM 1000...
Looks like I was running the wrong job... should have become a notary....

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HI

Found this

Cheers

JJ

IPOH: The state government has abolished the RM5,000 levy imposed on foreigners conducting property transactions in the state.

Mentri Besar Datuk Seri Mohammad Nizar Jamaluddin said the move would encourage foreigners to invest in the state.

“To be a foreign-investor-friendly state, we have decided to abolish the RM5,000 levy imposed on all property transactions, including property put up for auction by foreigners,” he said yesterday after chairing the weekly state executive council (exco) meeting.

On whether the move would result in a loss of state revenue, Nizar said the government was not looking at the move as a loss.

“It is an opportunity for foreigners to come to Perak,” he said.

Senior exco member Datuk Ngeh Koo Ham said the move would also benefit Malaysians who wanted to transfer their property to their children who had become citizens of other countries.

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hi,

Thanks for the information JJ.

It will also mean that the about 2 month add-on delay for state approval will (or may) disappear.

regards, Scott

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Hi Scott, Shane, everyone,

Just a short note to say our solicitor submitted our State Approval application on 13th June 2008.  The application was approved on a letter dated 24th June 2008  by KL land office.  7 working days turn-around! Albeit it took another 11 days for the letter to leave the land office!  I think my solicitor is a wizard!!  No bung, no donations given!!

So, people, MY administration is getting better!!