Inheriting property in Malaysia: A clear guide for foreigners and their families

A foreigner can inherit property in Malaysia. Whether you are a foreigner inheriting from a Malaysian relative
or a Malaysian who has changed your citizenship, you still have a legal right to inherit property. However,
the process involves one important step: obtaining approval from the relevant state government.

This guide explains the legal requirements, costs, and smart planning strategies to help ensure a smooth
transfer of property for you and your family.

1. State Approval (Foreigner Consent)

The most important step for foreigners inheriting property in Malaysia is obtaining approval from the
relevant state government where the property is located. This requirement exists under Malaysia’s
National Land Code and is commonly known as Foreigner Consent.

While the process is straightforward, it must be followed correctly. The usual sequence is:

1. The executor of the will obtains a Grant of Probate in Malaysia.
2. A lawyer applies for State Consent to transfer the property to the foreign beneficiary.
3. Once approval is granted, the lawyer completes the transfer and registers the beneficiary as the new owner on the property title.

Changing citizenship does not remove your right to inherit property. For example, if a Malaysian citizen
later becomes a Singaporean citizen, they can still inherit property from their parents. However, they
must still apply for Foreigner Consent before the property can be transferred to them.

To make the process smoother, it is highly recommended to have a properly drafted Malaysian will.
A clear will can significantly reduce delays and prevent disputes among beneficiaries.

2. Understanding the Costs: Taxes and Fees

One of the most common concerns when inheriting property is tax. Fortunately, Malaysia has relatively
favourable rules when it comes to inheritance.

No Inheritance Tax

Malaysia does not have an inheritance tax. The tax was repealed in 1991 and has not been
reintroduced. This means beneficiaries do not pay taxes on the value of assets they inherit.

However, there are still several costs involved in transferring inherited property.

Real Property Gains Tax (RPGT)

RPGT only applies if the inherited property is sold later. It is a tax on the profit gained from selling
the property.

For inheritance cases, the property is treated as being transferred to the beneficiary at
market value on the date of transfer. This means the holding period for RPGT begins when
the property title is officially transferred to the beneficiary.

For foreigners (non-citizens and non-permanent residents), RPGT rates are typically:

Stamp Duty

The stamp duty for transferring inherited property from the deceased’s estate to a beneficiary is
only a nominal fee of RM10.

State Consent Application Fees

While some states impose levies when foreigners purchase property, inheritance transfers are usually
treated differently.

For example, certain states such as Johor have confirmed that property transferred through inheritance
does not attract a percentage-based levy on the property value. However, administrative fees still apply
when submitting the State Consent application. These fees typically range from a few hundred to a few
thousand ringgit depending on the state.

Legal Fees

Legal fees are required for services such as:

• Obtaining the Grant of Probate
• Preparing legal documentation
• Handling the property transfer and registration

The exact amount will depend on the complexity of the estate and the lawyer handling the matter.

3. Key Takeaways and Final Advice

Foreigners can legally inherit property in Malaysia, but the process requires proper documentation
and approval from the relevant state government.

The most effective way to ensure a smooth transfer is to prepare a
separate Malaysian will that clearly governs local assets.

A properly drafted will helps:

• Reduce delays during probate
• Prevent disputes between family members
• Ensure property is transferred according to your wishes
• Make the process significantly easier for foreign beneficiaries

If you own property in Malaysia or expect to inherit one, the best step is to seek qualified legal
advice and create a legally sound Malaysian will. Doing so protects your assets and ensures your
legacy is transferred smoothly to your loved ones.