A foreign buyer looking at a RM1 million home in Johor should not budget only for the purchase price and down payment. Two major government charges now need particular attention: Malaysia's 8% stamp duty on the residential transfer instrument and Johor's 3% foreign-interest approval charge. They are separate charges, paid to different authorities, and together can materially change the cash required to complete a purchase.
1. MOT stamp duty: the foreign-buyer rate increased from 4% to 8%
The Memorandum of Transfer, commonly called the MOT, is the instrument used to register ownership in the buyer's name. Under Malaysia's Finance Act 2025, the stamp duty for a residential property sold from 1 January 2026 to a foreign company or an individual who is neither a Malaysian citizen nor a permanent resident is RM8 for every RM100 of the higher of the consideration or market value. In practical terms, that is a flat 8% rate.
This is not the normal progressive citizen rate. It is also not 8% only on the portion above RM1 million. For an eligible foreign purchase, the flat rate applies to the full assessed value of the residential property.
| Foreign residential transfer | Rate | Duty on RM1,000,000 |
|---|---|---|
| Previous position | 4% flat | RM40,000 |
| From 1 January 2026 | 8% flat | RM80,000 |
| Increase | +4 percentage points | +RM40,000 |
2. Johor state levy: the foreign-interest approval charge is now 3%
Foreign ownership also involves the Johor State Authority. The Johor Land and Mines Office currently publishes an approval charge of 3% of the property value or RM30,000 per title, whichever is higher, for residential and commercial acquisitions by foreign interests. A separate application registration fee of RM2,000 per title is also listed.
For a new purchase from a developer, the 3% is based on the sale value stated in the duly stamped SPA. For a subsale, Johor states that the charge uses the JPPH valuation or the value in the duly stamped SPA, whichever is higher.
| Johor foreign-interest charge | Earlier rate | Current published rate |
|---|---|---|
| Percentage | 2% | 3% |
| RM1,000,000 example | RM20,000 | RM30,000 |
| Current minimum | — | RM30,000 per title |
| Application registration | — | RM2,000 per title |
3. Worked example: foreign buyer purchasing at RM1 million
Assume an individual foreign buyer who is not a Malaysian permanent resident purchases a qualifying residential property in Johor at RM1,000,000. Assume the purchase price is also the accepted value for the relevant assessments.
| Item | Calculation | Estimated amount |
|---|---|---|
| MOT / transfer stamp duty | RM1,000,000 × 8% | RM80,000 |
| Johor foreign-interest approval charge | RM1,000,000 × 3% | RM30,000 |
| Johor application registration fee | RM2,000 per title | RM2,000 |
| Total of the above government charges | RM80,000 + RM30,000 + RM2,000 | RM112,000 |
RM1 million property: impact of the rate changes
Comparison includes only MOT stamp duty and the state levy: 4% + 2% previously versus 8% + 3% now. The RM2,000 application fee and other transaction costs are excluded from the bars.
The two rate changes add an illustrative RM50,000 to these selected charges on a RM1 million purchase: RM40,000 more for MOT stamp duty and RM10,000 more for the Johor state levy. Including the published RM2,000 state application fee, the current subtotal becomes RM112,000.
4. RM112,000 is not the full cash budget
The example above is deliberately limited to the two headline percentage charges and the Johor application registration fee. A buyer may still need to budget for:
- SPA and conveyancing legal fees
- Loan agreement legal fees and loan stamp duty, if financing is used
- Valuation fees and bank disbursements
- Title search, registration and other land-office fees
- Developer or management deposits, maintenance charges and sinking fund
- Insurance, renovation, furnishing and utility deposits
- Any tax or charge that depends on the exact title, use, buyer status or transaction structure
Your lawyer should prepare a transaction-specific completion account. Do not treat the RM112,000 illustration as an all-in quotation.
5. Five checks to make before paying a booking fee
- Confirm the title and legal use. The 8% federal rule discussed here is for residential property. A serviced apartment or mixed-use property may require closer review of its title and instrument.
- Confirm foreign eligibility. Check the current Johor minimum price, property-type restrictions, quota or Bumiputera status, and whether state consent is obtainable.
- Ask which value will be assessed. Both federal duty and the Johor charge can involve the higher of transaction value and an official valuation, depending on the transaction.
- Get a written cost estimate. Ask the conveyancing lawyer to separate federal stamp duty, state approval charges, legal fees, disbursements and financing costs.
- Protect the booking payment. Ensure the booking terms state what happens if foreign consent, financing or legal due diligence is unsuccessful.
Sam's take
The biggest mistake is comparing a Johor property's headline price with another market while ignoring the completion cash. In 2026, a foreign buyer of a RM1 million residential property may need RM110,000 for the 8% federal transfer duty and 3% Johor approval charge alone. That is before legal, financing and ownership costs.
Before selecting a unit, work backwards from your total available cash. Confirm your foreign eligibility and obtain a lawyer's estimate for the exact title. A property can fit your purchase budget but still exceed your completion budget.
Official references
- Finance Act 2025 (Act 874), Inland Revenue Board of Malaysia — the statutory 8% duty for qualifying foreign residential transfers from 1 January 2026.
- Malaysia Budget 2026 Tax Measures, Appendix 14 — policy explanation of the increase from 4% to 8%.
- Johor Land and Mines Office: Fee Information — current foreign-interest application fee, 3% approval charge and minimum amounts.