Translation and Copyright of Halim Hong & Quek

Disclaimer: This translation is only as a general reference. This translation is based on the Malay Version of Circular issued by Johor
Land Office. In the event of any conflict or discrepancy between the provisions of this translation and the Malay Version of Circular, then
unless otherwise expressly provided in writing, the provisions of the Malay Version of Circular shall prevail. Halim Hong & Quek
does not bear any legal responsibilities and obligations arising from the causes of this translation.

PTG Ref : (D 15/92 (WA) JILID 4 (20)

CIRCULAR BY PENGARAH TANAH DAN GALIAN JOHOR BIL 02 TAHUN 2014

NEW POLICY ON THE ACQUISITION OF PROPERTY BY FOREIGN INTEREST

IN THE STATE OF JOHOR

1.

Purpose
The purpose of this secular is to convey/deliver the results/decisions passed during the Housing
Task Force Meeting Johor held on July 25, 2013 and the Johor Government Council Meeting held
on 4 November 2013 as per Ringkasan Mesyuarat Bil. Perkara-Perkara Lain i.e Kertas J/HB(T):
2067(A)/B/2013.

2.

Definition
For the purpose of this circular, foreign interests are referring to people who are not Malaysian
citizens and foreign companies as defined under Section 433A of the National Land Code 1965 and
Section 4 of the Companies Act 1965.

3.

Background
Under Section 433B of the National Land Code 1965, foreigner and foreign company are allowed to
own land in this State with the approval of the State Authorities. Johor State Government has
allowed the acquisition of property by foreign interest in the state of Johor and the said decision has
been circulated and communicated through:
i.

Johor PTG Newsletter dated December 15, 2004 effective on May 1, 2005.

ii.

Johor PTG Circular No. 1/2009 effective on 1 April 2009.

iii.

Johor PTG Circular No. 1/2010 effective on 1 July 2010.

The policies are consistent with the results/decisions passed during the State Government of Johor
Meeting and the orders issued by the Economic Planning Unit (EPU) of the Prime Minister
Department. The policies have been reviewed in accordance with the current needs of the
development in order to maintain the stability of the property market growth in the state of Johor and
at the same time retaining foreign direct investment to the State.

4.

Effective date
The effective date of this new policy (on the acquisition of the property by foreign interest in the state
of Johor) is 01/05/2014, and shall remain in effect until new ruling overcome it.

NEW POLICY ON THE ACQUISITION OF PROPERTY BY FOREIGN INTEREST

IN THE STATE OF JOHOR

5.

Guidelines on the acquisition of the property by foreign interest in the state of Johor
The guidelines that will be effective from 01 May 2014 are as below:

5.1

Applications that require the approval of the Economic Planning Unit (EPU) and the Prime
Minister Department

5.1.1

All acquisition of property, except for residential units, require approval of the Economic Planning
Unit of the Prime Ministers Department are as follow:

a.

direct acquisition of property resulting in the reduction of Bumiputera interests and/or

government agency valued at RM20 million and above, and

b.

indirect acquisition of property by non Bumiputera interest through acquisition of shares that
resulted in a change of company control in the interest of Bumiputera and / or Government
agency wherein the property represents more than 50 percent of total Company assets and
the value is in excess of RM20 million.

5.1.2

All acquisition of property by foreign interest who do not require the approval of the Economic
Planning Unit, the Prime Minister Department but under the jurisdiction of the Ministry and / or
related Government Departments are as below:

a.

acquisition of commercial units valued at one million (RM1,000,000.00) and above;

b.

acquisition by lease for agricultural land valued one million (RM1,000,000.00) and above or
area measuring at least 15 acres, whichever is higher for the following purposes:

i.

Commercial agricultural activities using advanced and modern technology or;

ii.

Agro-tourism project or;

iii.

Carry out agricultural activities or industries (based on agricultural) for the production of
goods for export.

c.

Acquisition of industrial land valued at RM1,000,000.00 and above;

d.

Acquisition of all types of new residential or sub sales valued at RM1,000,000.00 and above;

e.

Transfer of property to foreigner based on love and affection is allowed among close relatives
only

(Close relatives means individual having marital relations (husband / wife) or with blood relations
(grandparents, parents, siblings and children, including stepchildren and adopted children verified by
the National Registration Department)

NEW POLICY ON THE ACQUISITION OF PROPERTY BY FOREIGN INTEREST

IN THE STATE OF JOHOR

5.1.3

Conditions for acquisition of the transactions referred to in paragraph 1 (a) and

(b) above shall

include the equity and paid-up capital as follows:

a.

Condition on equity
A company has ownership of at least 30 % of Bumiputera interest.

b.

Condition on paid-up capital

Local company owned by local interest with minimum paid-up capital of RM100,000.00; and
Local company owned by foreign interest with minimum paid-up capital of RM250,000.00.

c.

Compliance period condition

For direct acquisition of property, condition on equity and paid-up capital imposed by the
Economic Planning Unit, Prime Minister Department must be complied with before the
property is transferred.

For indirect acquisition of property, condition on equity and paid-up capital imposed by the
Economic Planning Unit, Prime Minister Department must be complied with within one (1)
year from a written approval is issued out.

Compliance on the equity and paid-up capital conditions shall be reported to the Economic Planning
Unit, Prime Minister Department.

5.2

Minimum price and quota

5.2.1

Minimum price of property to be acquired by foreign interest is RM1,000,000.00 (Ringgit Malaysia

One Million only) per unit for all types of property described in Appendix A.

5.2.2

Approved quota for acquisition of property by foreign interest as per Appendix A.

5.2.3

Calculation method to determine the number of units that can be sold to the foreign interest in a
housing project is maintained i.e the quota is calculated based on the balance/remaining units
after deducting Bumiputera units/Lots, and not based on the total units in the housing project.

5.3

Payment on application and approval

5.3.1

Payment on application to acquire property by foreign interest is RM1,000.00 per title. For an
application that has been rejected by the State Authorities and the applicant wants to file an appeal,
the appeal application fee is RM2,000.00 per title. Appeals can be submitted to the Chief Minister of

NEW POLICY ON THE ACQUISITION OF PROPERTY BY FOREIGN INTEREST

IN THE STATE OF JOHOR

Johor in Johor Chief Ministers office of Level 4 , Bangunan Dato Jaafar Muhammad, Kota Iskandar,
79502 Nusajaya, Johor.

5.3.2

Payment on the approval of acquisition of property by foreign interest for each title is as follows:
a.

For acquisition through sale and purchase agreement, payment approval is 2% of the
purchase price mentioned in the sale and purchase agreement duly stamped completely in
accordance with the provisions of the Stamp Act 1949, or RM20,000.00 whichever is higher. If
the approval payment is calculated to be a fraction of one ringgit, the said fraction shall be
rounded to one ringgit.

b.

For acquisition through lease, payment approval is 2% of the lease amount mentioned in
lease agreement duly stamped completely in accordance with the provisions of the Stamp Act
1949, or RM20,000.00 whichever is higher. If the approval payment is calculated to be a
fraction of one ringgit, the said fraction shall be rounded to one ringgit.

5.3.3

Payment approval on acquisition of property by foreign interest shall be paid within 30 days from the
approval. For an extension of time on the payment after the expiration of 30 days, the sum of
RM1,000.00 for each title will be imposed.

5.3.4

For an application to extend the validity of the approval, the said application shall be made before
the expiry of the approval letter with the payment of RM1,000.00 be imposed on each title of
which the validity period of the approval shall be extended to another one (1) year.

5.3.5

The power to approve application on acquisition of property by foreign interest remain vested to
Director and Deputy Director of Johor Land and Mines provided that the maximum acquisition
value is RM10 million and the property (ies) is residential property (ies), commercial property (ies)
and agricultural lease. The power to approve application on acquisition of property by foreign
interest valued at more than RM10 miliion, vacant lands for future development including the
development has been approved by the State authority is vested to YAB Chief Minister of Johor.

5.4

Application to lease agricultural land

Foreign interest who intends to lease agricultural land is required to submit paper works / proposal
on the project to be carried out to Johor Economic Planning Unit (UPENJ) and Johor State
Agriculture Department in advance. The foreign interest is required to attach the comments by Johor
Economic Planning Unit (UPENJ) and Johor State Agriculture Department during submitting its
application to lease at Directors Office of Johor Land and Mines. This act is consistent with any
application to carry out agricultural projects run by UPENJ and at the same time to ensure the said
foreign interest possess the ability, capital and right technology to carry out agriculture project with

NEW POLICY ON THE ACQUISITION OF PROPERTY BY FOREIGN INTEREST

IN THE STATE OF JOHOR

high impact. The maximum period for foreign interest to lease agriculture land is not more than thirty
(30) years.

5.5

Acquisition of property in secondary market (sub-sales)

5.5.1

Types of properties that can be acquired by any foreign interest through subsales as per Appendix B.

5.5.2

Foreign interest is allowed to acquire property in subsales from existing property owned by foreign
interest.

5.5.3

For application to acquire property owned by Malaysians and local companies by foreign interest
through subsales, the said application will be considered from case to case basis.

5.5.4

Value of the property for the purpose of approval of the acquisition through subsales is based on the
valuation carried out by Property Valuation and Services Department and not based on the sale and
purchase agreement document signed by the seller and the buyer.

5.6

Acquisition of Bumiputera Lots

5.6.1

Foreign interest may own property designated for Bumiputera (Bumiputera Lot Quota) in a housing
project after the said units obtained approval from Johor State Secretary office (Housing Division)
subject to the existing balance of the foreign interest quota.

5.6.2

Foreign interest also may own Bumiputera Lot duly registered in the name of Bumiputera in
subsales provided approval from the State authority is obtained of which the approval application is
submitted to office of State Land and Mines Director who shall consider the application from case to
case.

5.7

Approval and application among family members

Application for acquisition of property by foreign interest based on love and affection among close
relatives can be submitted without taking into consideration on the type of the property and value
(except for Malay reserve land) subject to approval payment if approved. Close relatives means
individual having marital relations (husband / wife) or with blood relations (grandparents, parents,
siblings and children, including stepchildren and adopted children verified by the National
Registration Department).

6.

Type of property restricted to be acquired by foreign interest

Type of property restricted to be acquired by foreign interest are:

6.1

Residential unit / shop under the category of low cost and medium low cost.

6.2

Single storey terrace unit / 1 storey terrace unit.

NEW POLICY ON THE ACQUISITION OF PROPERTY BY FOREIGN INTEREST

IN THE STATE OF JOHOR

6.3

1 or 2 storey of shop / office Lot.

6.4

Property designated for Bumiputera in a housing development unless approval from State Secretary
Office or the State authority is obtained.

6.5

Property under Court auction / public auction (section 256-260 of the National Land Code)

6.6

Malay reserve land.

6.7

Stall or service workshop.

6.8

Agricultural land under the concept of homestead.

6.9

Property under National Heritage Act 2005.

7.

Application procedures

7.1

Foreign interest can submit the application on acquisition of property in person or through appointed
lawyer.

7.2

All applications must use the prescribed application form (Borang KA. 1/2005 - KA 6/2005) with
attached supporting documents as per check list in Appendix C.

7.3

For first time application from the Developer to sell the residential units in a housing / land
development, the check list as per Appendix D.

7.4

Presentation instrument of transfer (Form 14A of the National Land Code) for the purpose of
registration shall be made within 12 months from the date of approval and/or 12 months from the
date of registration of the Strata Title, whichever is applicable.

7.5

Foreign / Local Financial Institution financing the purchase of the relevant property may receive a
charge / the same property as collateral but the said financial institution may not capture the auction
should the same property be auctioned on the charge/collateral.

7.6

Approval granted cannot be transferred or conveyed to any other party in any way.

7.7

Non-citizens appointed as Executor or Administrator who then transfers the property to a

beneficiary, shall submit their application for consent to acquire with payment of RM1, 000.00 for
each ownership. Payment for approval will not be levied for such application.

8.

MALAYSIA MY SECOND HOME PROGRAM

Acquisition by Foreign Interest under this program is allowed with the following conditions:

8.1

Direct purchaser from a Developer. Developer is required to determine the reserved area and shall
have obtained consent from the State Authority.

8.2

Prescribed conditions are as follow:

8.2.1

Purchaser required to first obtain approval from Immigration Department.

8.2.2

To own a Fixed Deposit with a minimum sum of RM150,000.00.

8.2.3

Individual income of RM7,000.00 or household income of RM10,000.00.

8.2.4

Aged 50 and above.

NEW POLICY ON THE ACQUISITION OF PROPERTY BY FOREIGN INTEREST

IN THE STATE OF JOHOR

8.2.5

To have a medical report from approved hospital.

8.2.6

To have a covered Health Insurance in Malaysia.

8.3

Upon obtaining approval from the Immigration Department evidenced with Visa/Passport stamped
by MMSH, only then one will be considered eligible to acquire property under this Program.

8.4

This approval is non-transferrable/transferred to any party in any way whatsoever.

8.5

Construction of development to be at least 50% completed and verified by Architect. In the case of
completed property Certificate of Fitness for Occupation (CFO) must be included.

FINAL DATE FOR SUBMISSION OF FOREIGNER PROPERTY ACQUISITION CONSENT

APPLICATION BY FOREIGN INTEREST UNDER CURRENT POLICY.
All application involving purchase of property valued less than RM1,000,000 (Ringgit Malaysia One
Million) where sale and purchase agreement has been signed and stamped with execution before 01
May 2014 is exempted from the new policy with condition that the completed application shall be
submitted to Johors Director of Land and Mines Office (Pejabat Pengarah Tanah dan Galian Johor)
during office hours before or on 29 May 2014 (Thursday).

10

REVOCATION OF CIRCULAR
With the coming into force of this circular from 01 May 2014, the Johor PTG Circular dated 15
December 2004, Johor PTG Circular Bil. 1/2009 and Johor PTG Circular Bil. 1/2010 is revoked.

11

FURTHER ENQUIRIES
Further enquiries may be submitted to officer at Foreign Interest Acquisition Unit (Unit Perolehan
Kepentingan Asing), Johors Director of Land and Mines Office (Pejabat Pengarah Tanah dan
Galian Johor):
Tel No. 07-266 6865 / 07-266 6802
Fax No. 07-266 1440

This circular may also be obtained at the official portal of Johor Land Administration (Pentadbiran Tanah
Johor) at the following address: www.ptj.johordt.gov.my

BERKHIDMAT UNTUK NEGARA

(HAJI JAMA BIN JOHAN)
Pengarah Tanah dan Galian Johor
Dated 18 February 2014