Buying guide · For Indonesian buyers
Buying Malaysian property from Indonesia: the complete guide
Where Indonesian families buy and why, what it really costs, how to move and report the money correctly — and the inheritance issue most Indonesian owners do not find out about until it is too late.
By Jason Lim · Smart Asset with Jason · Updated 24 September 2026 · 12 min read
For many Indonesian families, Malaysia is already a second home in practice: the hospital you trust, the university your children attend, the city you fly to for business or holidays. Owning property there can make a lot of sense — but only if it is bought in the right place, in the right name, and with the inheritance side planned from day one.
Key points
- Indonesian citizens buy as foreigners: each state’s minimum price, state consent and a flat 8% stamp duty apply.
- Choose the city by purpose: Penang and Kuala Lumpur for healthcare, Kuala Lumpur/Selangor or Johor for education, Johor Bahru for Batam and Singapore links.
- Indonesian tax residents are taxed on worldwide income — declare the property and any rent in your SPT, and claim credit for Malaysian tax.
- Indonesia is not a Commonwealth country, so an Indonesian grant of probate cannot simply be resealed in Malaysia.
- For Muslim owners, Malaysian property passes by faraid; for non-Muslim owners, a Malaysian will is the simplest protection.
In this guide
- Why Indonesian families buy in Malaysia
- Choose the city by purpose
- The Malaysian rules for Indonesian buyers
- What it really costs: a worked example
- Paying for it: funds and loans
- Step by step: from Indonesia to handover
- Tax and reporting in Indonesia
- Inheritance: the issue most owners miss
- Longer stays: MM2H
- Checklist and FAQ
Why Indonesian families buy in Malaysia
- Healthcare: Indonesia is by far the largest source of Malaysia’s medical travellers — around 65% of the total, according to figures reported by MIDA — with Penang and Kuala Lumpur taking most of that care.
- Education: international schools and branch campuses of foreign universities at a lower cost than Singapore or Australia.
- Closeness: short flights from Jakarta, Medan, Surabaya and other cities, and direct ferries between Batam and Johor Bahru.
- Familiarity: a similar language, halal food everywhere, and ASEAN visa-free entry for short visits.
- Diversification: an asset held in ringgit, outside Indonesia, under a common-law legal system.
Choose the city by purpose
| If the property is mainly for… | Look at | Why |
|---|---|---|
| Regular medical visits | Penang (George Town area), Kuala Lumpur | Close to the hospitals most used by Indonesian patients |
| Children’s education | Kuala Lumpur and Selangor; Iskandar Puteri (EduCity) in Johor | Near international schools and university campuses |
| Business and travel links | Johor Bahru | Ferries to Batam, and next door to Singapore |
| Long-term wealth holding | Established areas of Kuala Lumpur, Penang or Johor Bahru | Deeper resale and rental markets matter more than a showroom discount |
A common mistake: buying next to a campus for a child’s three-year degree, then finding the unit hard to rent or resell. Always ask what the property will do after its first purpose ends.
The Malaysian rules for Indonesian buyers
- Minimum price: each state sets a floor for foreign buyers — for example around RM1 million for strata property in Johor and Kuala Lumpur, and lower in some areas such as mainland Penang.
- State consent: every foreign purchase needs approval from the state, which usually takes weeks to a few months; most states charge a levy for it.
- Restricted property: foreigners cannot buy Malay reserve land, Bumiputera units, low-cost housing or most agricultural land.
- Owners must be adults: children under 18 generally cannot be registered as owners, so a property “for the children” is usually bought in a parent’s name.
Full details are in my guide on foreigners buying property in Malaysia.
What it really costs: a worked example
An estimate for a RM1,000,000 condominium in Johor Bahru bought by one Indonesian individual with a 60% bank loan:
| Cost | Estimate | Notes |
|---|---|---|
| Purchase price | RM1,000,000 | Must clear the state’s minimum price |
| Stamp duty on the transfer | RM80,000 | Flat 8% for foreign buyers from 1 January 2026 |
| Johor state consent levy | RM30,000 | 3% (minimum RM30,000) as announced by Johor in 2025 — confirm the current rate |
| Stamp duty on the loan (RM600,000) | RM3,000 | 0.5% of the loan amount |
| Legal fees (sale and loan) | Ask for a quote | Set by Malaysia’s legal fee scale |
| Cash needed up front | ≈ RM510,000+ | 40% deposit, plus stamp duties, levy and legal fees |
Then budget for monthly maintenance and sinking fund, yearly quit rent and assessment tax, insurance and — if you rent it out — management fees and Malaysian tax on the rent.
Paying for it: funds and loans
Indonesia operates a free foreign-exchange regime, so there is no fixed annual cap on sending money abroad. In practice, banks on both sides will ask for supporting documents for large transfers. Three habits save a lot of trouble:
- Pay from an account in the buyer’s own name — Malaysian lawyers must check the source of funds.
- Keep the booking form and sale agreement ready for your bank before each transfer.
- Ask your bank for a quoted exchange rate each time; on a large transfer a small margin difference adds up.
Can I get a Malaysian loan?
Some Malaysian banks lend to foreign buyers, usually 60–70% of the price (often 50–60% for a first application), with loans to be repaid by around age 65–70. They typically discount foreign-currency income by 10–20% to allow for exchange-rate risk. Get a pre-assessment before you book — see my guide on loans for foreign buyers.
Step by step: from Indonesia to handover
Step 1 · Decide the purpose and the owner
Healthcare, education, business or wealth holding — and whose name goes on the title. This shapes everything else.
Step 2 · Check the numbers
Estimate the full cost, and get a bank pre-assessment if you plan to borrow.
Step 3 · Shortlist and verify
I confirm each unit is open to foreigners, above the state floor and has a clean title. Viewings in person or by video call.
Step 4 · Book and sign
Pay the booking fee and sign the sale and purchase agreement through a Malaysian lawyer.
Step 5 · Transfer funds and apply for the loan
Send funds from your own account with the documents ready; submit the loan application if you are borrowing.
Step 6 · State consent
Your lawyer applies for state consent. The sale cannot complete until it is granted.
Step 7 · Complete and hand over
Balance and stamp duty are paid, the title is transferred, and you receive the keys.
Step 8 · Protect and report
Put your inheritance plan in place, arrange management if you will rent it out, and add the property to your next SPT.
Tax and reporting in Indonesia
- Worldwide income: under Indonesia’s Income Tax Law, tax residents are taxed on income from inside and outside Indonesia — including rent from a Malaysian property.
- Declare the asset: list the Malaysian property among your assets in your annual SPT, and keep the purchase documents as support.
- Foreign tax credit: Malaysian tax paid on the rent can be credited under PPh Pasal 24, up to a limit. Any excess cannot be refunded, so ask your konsultan pajak to check the numbers.
- In Malaysia: rent is taxed there as a non-resident’s income, and when you sell, real property gains tax is 30% of the gain within five years and 10% from the sixth year.
Inheritance: the issue most owners miss
Malaysian land passes under Malaysian law, whatever your arrangements in Indonesia. And because Indonesia is not a Commonwealth country, an Indonesian court grant cannot be resealed in Malaysia. Your family would have to apply for a fresh grant in a Malaysian court — law firms estimate around four to six months or longer — before they can sell, rent or even manage the property.
If you are Muslim
The estate of a Muslim is distributed according to faraid. A wasiat can direct up to one-third of the estate, generally not to heirs who already inherit under faraid. Many families also use hibah (a lifetime gift) as part of their plan. This must be set up by a Syariah estate-planning specialist — ideally at the time of purchase — and I will connect you with one.
If you are not Muslim
Without a will, Malaysian property of a non-Muslim is divided under the Distribution Act 1958 — for example one-third to a spouse and two-thirds shared between the children — which may not match your wishes. A Malaysian will covering your Malaysian assets is the simplest protection, and it must be drafted to sit alongside any Indonesian arrangements.
As a licensed will writer, I prepare Malaysian wills for non-Muslim clients alongside the purchase. It is the one step that saves your family months if something happens.
Longer stays: MM2H
Indonesians can visit Malaysia visa-free for short stays, but owning property does not give you the right to live there. For longer stays — for example during extended medical treatment or while children study — the Malaysia My Second Home (MM2H) programme offers renewable passes in Silver, Gold and Platinum tiers, with fixed deposits from USD 150,000 and a requirement to buy property above a set price and hold it for ten years. Check the current terms before you commit.
Checklist before you pay a booking fee
Before you commit
- ☐ Clear on the property’s main purpose — and what happens after
- ☐ Decided whose name goes on the title (an adult)
- ☐ Unit confirmed open to foreigners and above the state floor
- ☐ Full cost estimated, including 8% stamp duty and levy
- ☐ Bank pre-assessment done if borrowing
- ☐ Funds ready in the buyer’s own account, with documents
- ☐ Konsultan pajak briefed on SPT reporting and tax credit
- ☐ Inheritance plan agreed — Malaysian will or Syariah planning
Frequently asked questions
Can I buy the property in my child’s name?
Only if your child is 18 or over. For younger children, the property is usually bought in a parent’s name, with the will or inheritance plan deciding who receives it later.
Can I pay from a company account in Indonesia?
Pay from the account of the person or company named as the buyer. Payments from a different party raise source-of-funds questions for the Malaysian lawyer and bank, and can complicate your tax reporting at home.
Is Johor Bahru close to Batam?
Yes. Ferries run between Batam and Johor Bahru’s Stulang Laut and Puteri Harbour terminals, which is why many Batam-based families and businesses look at Johor Bahru.
Do I need to be in Malaysia to sign?
Viewings can be done by video call and much of the paperwork handled through the lawyers. Some documents need to be signed in front of a lawyer or at a Malaysian embassy — I will tell you exactly which ones.
I already have a will in Indonesia. Is that enough?
Usually not for Malaysian property. Because an Indonesian grant cannot be resealed in Malaysia, your family faces a fresh application here. A Malaysian will, or Syariah planning for Muslim families, avoids most of that delay.
Sources
- MIDA — Indonesia remains largest contributor to Malaysia’s medical tourism market
- Pajakku — Tax on income received from abroad (PPh Pasal 24)
- Direktorat Jenderal Pajak — Tax return reporting
- Indonesian Tax — Exchange control in Indonesia
- KPMG Malaysia — Budget 2026: stamp duty
- LHDN — RPGT rates
- The Star — Johor to raise levy on property bought by foreign interests
- Global Law Experts — Buying residential property in Malaysia for foreigners
- PropCashflow — Foreigner home loans in Malaysia
- Mondaq — Resealing letters of representation in Malaysia
- PBL Legal — International estate planning in Malaysia
- Direct Ferries — Batam to Johor ferries
- Alter Domus — MM2H requirements
Rules, rates and bank policies change. This guide is general information checked on 24 September 2026. It is not legal, tax or financial advice — confirm your own position with a lawyer and a tax adviser in both countries.
Your situation is specific
Buying from Indonesia? Let us plan it properly from the start.
Tell me what the property is for — healthcare, your children’s education, business or holding wealth — your budget and who should own it. I will reply with the areas that fit, a cost estimate and the steps in order.