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Types Of Property Titles in Malaysia

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 In Malaysia, there are mainly 3 types of land titles:

1) Freehold
2) Leasehold
3) Malay Reserve.
However purchasers must be aware of other titles like Master Title, Individual or Strata Title.

1) Freehold Property
  • It means ownership in perpetuity.
  • It is easy to transfer from one person to another as no consent is required from state or federal government authorities for the transfer and charge of the property. However, in certain states or some places in Klang Valley, freehold properties may have “restriction in interest” and which required state authorities or land office consent. The time taken to complete the transaction is usually 3 to 4 months.
  • The government has the right to acquire the freehold properties for Public Projects. You will be compensated at the market rate for the forced acquisition of your entire property or part of your land.
  • Freehold properties are the most preferred types of properties as they command better resale value and they tend to appreciate faster.

2) Leasehold Property
  • It simply means you are leasing or renting the property from the government. The lease may be ranging from 60 to 99 years. In principle, once the lease expires, the property will have to return to the state and you will not be entitled to any sort of compensation. However in practice, when your lease is about to expire, you are required to apply to relevant land office or authority for a lease extension and pay the extension premium. The amount payable depends on various factors such as type of property, size, location, length of lease extension and etc. Normally, property price will increase tremendously when the lease renewal is granted.
  • Transfer process from the seller to buyer is lengthy as consent from the state or federal government is required. It usually takes 6 to 9 months to complete the transaction. In some cases, it even take longer time to complete.
  • During the lengthy transfer process of 6 to 12 months, seller may change his mind not to sell because the property price has gone up and the transaction may be aborted. Therefore it is important for the buyer to put an exit date about 12 to 18 months in the SPA agreement in order to prevent the seller from terminating the agreement when there is a longer than usual delay in obtaining the consent.

3) Malay or Bumiputra Reserve
  • Due to government economic policies, these type of porperties are reserve for Malay or Bumiputra. Hence, non-bumi are not allowed to buy these properties.
  • And just in leasehold properties; state consent has to be given for transfer.
  • Majority of banks will not give a mortgage loan for Malay Reserve land properties.
  • The future appreciation potential is below freehold and leasehold properties due to limited pool of potential buyers.


4) Other Type Of Property Titles
  • A Master Title is a title for the entire project approved for development. For landed properties, the developer will have to sub-divide the Master title into individual title upon completion and handing over to the purchasers; whereas for high-rise development, the developer will have to apply for Strata Title upon completion and handing over to individual purchaser. The issuance of individual title is fast but the issuance of strata title is very tedious and time consuming. Many high-rise properties were completed more than 20 years ago but the properties are still without strata titles.
  • Upon the issuance of the individual or strata title, the owners on longer need to apply for consent or undertaking from the developer when selling their properties.

5) Differences between Master Title and Individual/strata Title

Master TitleIndividual / Strata Title
Developer is the rightful owner. Uses DoA lodged at high court to assign rights of a property over to a purchaserPurchaser is rightful owner. Uses MoT to change the owners name on the property title deed at the Land Office
A chain of Sale & Purchase Agreements (SPA) and DoA leading all the way back to the original sale must be used to prove latest ownershipName on property title deed is sufficient to prove latest ownership
Most banks will not finance a property if it is still on Master Title 10 years after completion



No issue with financing





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