How-to Guide for Purchasing Property in Malaysia

How difficult is the property purchase process in Malaysia?

Foreigners can purchase any kind of property with a minimum value of MYR250,000 (US$76,453). They are allowed to purchase up to two residential properties – two condominiums (max. 50% foreign ownership within a block) OR one condominium and one of the following:

  • Terrace or linked houses above two storeys, but limited to 10% of the total number of units built of this type
  • Lands/bungalows and semi-detached houses, but limited to 10% of units built of these typesThe first step to purchasing property in Malaysia is to hire a real estate lawyer to assist in the transaction. Once property is selected, a Letter of Offer/Acceptance is signed, and a 3% deposit is expected from the buyer.

    Within 14 days, the Sale and Purchase Agreement is signed. The buyer must pay another 7% deposit. From the date of the signing, the buyer has a maximum of three months to accomplish full payment.

    The Sale and Purchase Agreement must be stamped at the Stamp Office. After the examination on the property of the valuation department, Stamp Duty is paid to the Stamp Office. The transfer must be registered at the Land Office Registry.

    Be cautious when buying new property in unfinished condominium projects. Buyers may not be fully protected against default, an issue vigorously raised by the Malaysian House Buyers’ Association, which has pointed to flaws in The Housing Development (Control & Licensing) Act 2002, and the Strata Titles Act. Those buying unfinished property from developers should ensure that the developer has a valid Developer’s License and a valid Sales & Advertising permit.

  • Legal Fee
    Legal fee is based on the property value.
  • Stamp Duty:
  • Other Fees
    Other fees are around MYR180 (US$58). Other fees include stamping fee (MYR10 or US$3per document), adjudication fee (MYR10 or US$3), search fee (MYR60 or US$18), and registration fee (MYR100 or US$31).

    Real Estate Agent´s Fee:
    Real estate agent’s fees are regulated by the Board of Valuers, Appraisers and Estate Agents Malaysia (LLPEH). Commission is paid either by buyer or seller, subject to a maximum discount of 30% but a minimum fee of MYR1,000(US$306) per case. The scale is not applicable to sale of foreign properties in Malaysia.

How-to Guide for Buying Property in Brazil

With Brazil hosting the World Cup hosted in 2014 and the Olympic Games arriving in Rio in 2016, Brazil is increasingly on the radar as a place to buy property. Not least because as well as providing a spectacular location, property prices are still very attractive. But how easy is the actual buying process and what are the steps to take for a hassle-free purchase? We asked foreign exchange specialist, MoneyCorp, for their top tips on buying property in Brazil and we have added a few of our own for good measure! ….

  • Work with reputable partners – agents, lawyers and currency providers who can be trusted. Once you have identified your dream property, with regards to the actual buying process, it is very similar to that of the UK and other European countries (Brazilian law is based on Portuguese law). The appointed lawyer controls and leads the process overall and carries out the necessary due diligence such as checking title deeds, planning permission etc. ExpatMoneyChannel adds: When choosing a reputable partner always check that they are certified or registered to undertake the necessary work. Experience in dealing with foreign citizens buying abroad is recommended.
  • Obtain a CPF (Cadastro das Pessoas Fisicas) number. Any foreign citizen who buys in Brazil has to obtain this certificate. It is similar to a National Insurance number and ensures that the buyer has a legal identity in Brazil. It is not required to reserve a property but is needed at the stage when deeds are signed. If the buyer is married, the spouse must also apply for a CPF number. This number is obtained from any office of the Brazilian Internal Revenue Service, at any Brazilian consular office or Brazilian Embassy abroad or by visiting www.receita.fazenda.gov.br.ExpatMoneyChannel adds: You may be charged a fee for obtaining the certificate but ask your currency provider as some, such as Moneycorp, will offer this service for free.
  • Fees and Taxes. The buyer is liable for a number of other fees and taxes (around 7-8% of the purchase price) when purchasing in Brazil and these vary by state and by legal firm. Notary Fees (2 – 2.5%) are paid upon completion for the registration of title deeds at the Land Registry. Also payable on completion is Transfer Tax (around 3%). Legal fees (around 1.5% – 2%) are usually paid in two stages and the amount paid depends on the price of the property. ExpatMoneyChannel adds: Make sure you have a clear idea of all of the fees and ensure this is added to the total amount of money you need to raise to purchase the property.
  • Legalities. Lawyers should be familiar with the Portuguese language and the legislation surrounding property in Brazil, and must be licensed to practice in the relevant Brazilian State – it is advisable to appoint a lawyer who has been personally recommended.
  • Currency Transfers. Another consideration for buyers is how to send money to Brazil to fund their property purchase. The Brazilian real is a restricted currency, meaning that reals cannot be sent into Brazil unless they have been properly registered with Brazil’s Central Bank – this can make sending money to Brazil difficult and expensive. ExpatMoneyChannel adds: Do a cost comparison between different providers. You may well find it is cheaper and quicker to use a specialist currency exchange provider than a lawyer or bank. For example, MoneyCorp has a partnership with Banco Rendimento in Brazil. The service fixes the Brazilian real rate of exchange throughout the transaction so that clients know exactly how many reals will be delivered. It also reduces the time between transfer and receipt of funds, while guaranteeing that each trade will be registered with the Central Bank to facilitate the future repatriation of funds. Money arrives on the day it is expected.

How-to Guide for Buying Property in India

A foreign national of non-Indian origin resident outside India cannot buy any immovable property in India. It is illegal for foreign nationals to own property in India unless they satisfy the residency requirement of 183 days in a financial year (a tourist visa lasts for 180 days). It is also illegal to buy property on a tourist visa.

Moreover property cannot be purchased jointly in the name of one eligible person with one non-eligible person. That means a non-resident Indian (NRI) or foreign national of Indian origin (PIO) cannot buy a property jointly with a foreigner (see the excellent Reserve Bank of India FAQhttp://www.rbi.org.in/scripts/FAQView.aspx?Id=33).

Company structures are not satisfactory work-arounds (see below).

However, a foreign national resident in India does not require approval of RBI to purchase any immovable property in India. This is because once he is a resident in India, he gets the rights like any other resident. This freedom is however not available to citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan.

Leases are different, too. “Ineligible persons” (e.g. foreign nationals of non-Indian origin and also citizens of certain countries specified above) can acquire residential (not commercial) accommodation on lease not exceeding five years without any RBI permission. However, much property has been ‘sold’ to foreigners, particularly in Goa, where prices are cheap and developers are plentiful, on 5 year leases. The buyers won´t get title to the property until they can obtain residency, which is what most of them intend to do eventually. But they may be disappointed – increasingly new visas explicitly forbid foreigners from staying in India more than 180 days consecutively (see article in the Daily Telegraph).

There are also many stories of bribes being paid for the law to be circumvented. Currently an initial investigation into a selection of property deals has been launched by the chief minister of Goa, Pratapsingh Raoji Rane. The worst case scenario facing anyone who has not adhered to the letter of the law as stipulated in the Foreign Exchange Management Act of 1999 is the confiscation of their property assets. Some local xenophobia is being whipped up over this issue (see article in the Britishexpats.com Forum).

India  New Delhi properties for saleA foreign company which has established a Branch Office or other place of business in India, in accordance with FERA / FEMA regulations, can also acquire immovable property in India (see RBI FAQ). However it must be ‘is necessary for or incidental to carrying on his business’ and it seems increasingly that the whip is being cracked on those using this as a loophole to acquired residential property to live in or rent.

Non-Resident Indians (NRI), whether Indian citizens or foreign citizens of Indian origin, do not need permission from the Reserve Bank of India to acquire property if the seller is an Indian citizen.

A foreign national of Indian origin is “any person who or either of whose parents or any of whose grand-parents was born in India as defined in the Government of India Act, 1935” or any person who held an Indian passport at any given time.

There is no limit in the amount and/or number of properties that can be bought.

To purchase property, it is important for the buyer to hire a real estate attorney to protect his/her interests during the transaction. Once the property has been chosen, and a price has been negotiated with the seller, the attorney draws up an Agreement of Sale. Upon signing, the buyer normally pays a deposit of 10% to 20% of the purchase price. The lawyer then conducts due diligence and the buyer obtains the title documents from the seller. The title should be checked to have encumbrances.

The conveyance documents must be stamped at the Stamp Duty Office before signing. After this, the remaining balance is settled, and the deed is registered at the Sub-Registrar of Assurance Government duties are paid.

The whole process of registering property requires five procedures, which can be completed in around 44 days.

How-to Guide for Buying Property in Turkey

Getting Started Buying in Turkey

To open a bank account in Turkey in your own name you would need to get a tax number from a local tax office and then submit it with a copy of your passport to the appropriate bank branch. Due to strict banking regulations in Turkey, no one else will be able to withdraw money or view details about your account unless they have Power of Attorney or are a joint account holder.

While Turkish citizens and foreign nationals have equal ownership rights, some provisions of the Title Deeds Law became void on 26th July – thus suspending all property buying transactions by foreign nationals. However, a new Act has since been approved and announced in the Official Gazette (see The law of the land in Turkey below).

Sourcing finance for Turkish Property

A new mortgage law is also expected, with many predicting that lenders will enter the market by the middle of 2006. Historically, mortgage loans to non-nationals have been scarce or unattractive – with low ‘loan to values’ (LTVs), high rates and low terms on repayment only products (usually five years). This means that the best option for foreign buyers is either savings or by remortgaging an existing property at home (those opting for the latter option should account for possible delays in securing funding in the UK as it can take up to two months, although a good broker should be able to speed things up).

Nevertheless, a number of economic reforms are likely to provide impetus for a mortgage market in Turkey. Lower interest rates have created a borrowing boom in Turkey, with banks seeing more credit card business. It is hoped that this cultural change will drive further demand for mortgages and make them a mass market option for Turkish nationals.

Inflation has settled down in Turkey with consumer prices increasing at 7.72%, which is below the 8% official target for 2005 and the lowest for the last 37 years. The government economy taskforce recently announced its target for 5% inflation this year, and 4% for 2007 and 2008 – all of which will improve confidence in its business community.

Foreign buyers themselves are creating new economic conditions by raising property values and feeding the economy by creating new service industries or buying new products. As the price of property rises beyond domestic affordability, mortgages will become the only option for Turkish nationals.

Finally, a major factor for the introduction of a more competitive mortgage market is preparation for a more regulated environment as part of the ongoing negotiation for entry into the EU – although this is due between 2014 and 2020. In the meantime, mortgages are more likely to be introduced as a result of domestic market forces.

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The law of the land in Turkey

On 14th March 2005, the Turkish Supreme Court overturned Article 19 of the new Land Registry (Tapu) Act which permitted foreigners to buy in village areas of Turkey rather than just on coastal developments. It also allowed foreigners to own more than 30 hectares of land in Turkey. The same law eased restrictions on foreigners inheriting in Turkey and on the various secondary rights like granting and taking mortgages.

The main reason for this u-turn on foreign ownership was concern expressed by the Main Opposition Party that too much land was being sold off to foreigners. After a three month transition period following publication of the decision in the Official Gazette, the relevant provisions of the Tapu Act became void and property buying transactions by foreign nationals was suspended on 26th July 2005.

This freeze has created a huge backlog of transactions awaiting official approval and, while the process should take no more than 2-3 months, it may be some time before the process returns to normal (there is always the option of setting up a Turkish company to get around the delay but there are set up and administrative costs associated with this).

On 7th January 2005, a new act was announced in the Official Gazette, thus restoring the right of foreign buyers to own property in Turkey. The new law, which is almost identical to the previous act, will cover all applications made from 26th July last year.

There are some restrictions under the new law, with land purchases limited to 2.5 hectares (or 30 hectares with Cabinet Office approval) – although this has not been aimed at foreign buyers or investors in the main tourist areas.

How-to Guide for Buying Property in Spain

The process of buying a property in Spain usually runs as follows. First, the buyer makes an offer, usually through the seller’s estate agent. If this is accepted, then the buyer and seller sign a preliminary contract (contrato privado de compravento) and the buyer pays a deposit, typically 10 percent of the purchase price.

The buyer then arranges any mortgage they require, although they should have already discussed their needs with the mortgage provider. The contract of sale (escritura de compravento) is usually signed in front of a notary, at which point the full sale price, taxes and other costs become due.

Legal requirements

The services of a notary are not legally required to complete the sale, but it is advisable and required by many mortgages.

The seller is responsible for hidden defects in the property, even if they are not aware of them. However, in practice gaining restitution for such defects can be difficult and costly.

Paying the costs and taxes associated with buying a home can be completed by the buyer or their agent. It is the buyer’s responsibility, however, to ensure taxes are paid.

The buyer is also responsible for registering the property. The notary may provide this service for a fee, and/or may notify the registry office that the sale has taken place, without completing full registration.

Funding purchase: deposits and mortgages

Following the 2008 crash, Spanish banks have been heavily reformed with significant IMF involvement. This has reduced the number of lenders from around 50 to around 12, and significantly increased the regulation and oversight of the industry. As a result, many banks are lending less and mortgage rates and terms have become less favourable.

Mortgage lenders will not complete on a mortgage agreement until you own a property. For this reason, it’s important to include a clause in the contract allowing you to exit the agreement if you cannot acquire a mortgage.

Fees and charges

Costs are primarily paid by the buyer, and vary from region to region. Many are negotiable – there are no fixed fees for lawyers or estate agents. Costs paid by the buyer are typically around 8–14 percent of the property value and include:

  • Property transfer tax 5–10 percent (existing properties);
  • VAT (or IVA) at 10 percent (new properties);
  • notary costs, title deed tax and land registration fee 1–2.5 percent;
  • legal fees 1–2 percent (including VAT).

The estate agent’s fees are usually paid by the seller, and this is typically their only cost. Estate agents usually charge a percentage, typically around 3 percent of the final sale price.

Capital gains tax

Spain has a capital gains tax of 21–27 percent. To avoid this, sellers will sometimes request buyers to list the sale price as being lower than they actually paid. This is inadvisable as it can cause legal problems. Listing a lower sale price than you paid can also increase your own capital gains tax bills at a later date.

Capital gains tax is paid on the profit of selling your home, i.e. the difference between the listed purchase price and the listed sale price. Thus if you pay EUR 200,000 for a property and sell it for EUR 250,000 you will pay capital gains tax on EUR 50,000. However, if you previously accepted to list the purchase price as EUR 150,000, you will then be required to pay a capital gains tax on EUR 100,000.

If you are a resident and Spanish tax payer then the profit from selling your property counts as part of your savings allowance. If you’ve already exceeded the EUR 6,000 threshold or are non-resident, the tax rate is 21 percent. This would mean paying EUR 10,500 on the profit of EUR 50,000 described above, or double that if you’d listed the lower sale price.

You may be able to claim a reduction on the capital gains tax to account for inflation; or if you are purchasing another property in Spain; or if you are over 65 and have lived in the property as your main residence for more than three years.

Otherwise, unlike in other countries, capital gains tax applies no matter how long you’ve lived in the property. Your residential status does not affect the application of capital gains tax either, as capital gains tax should be paid in Spain for property owned in Spain even if you are no longer a resident. 

Choosing a reliable lawyer

Any lawyer practising in Spain should be registered with the local bar association (Colegio de Abogados). They will have a registration number that you can ask for and then verify with the bar association. Naturally, registration does not guarantee honesty or competence, but it is a good minimum standard to insist on. You can find a list of all the bar associations at the national website for Spanish lawyers, Abogacía Española.

Finding a translator

Many governments provide lists of lawyers and translators who speak both Spanish and another language. The British Embassy’s list of English speaking lawyers and translators is a useful resource. The Spanish government also provides a list of accredited translators (page in Spanish, follow first link in article text for up-to-date PDF).

Selling a property

The Spanish property market is in a difficult state at the moment, and you should not expect to sell a property both quickly and for a good price. Moreover, experts predict that prices will continue to drop in 2014, which means that you may struggle to recoup your investment.