I. Land Use Categories
There are three categories of land use in Malaysia, namely: agriculture, industry and building. These are expressed conditions specified in a land title. However, applications can be made to change the category of land use accordingly through the National Land Code and the respective State Land Rules.
II. Land Titles
There are three types of land title: individual title, strata title and master title. An individual title is the title for a particular piece of land and the property rights which comes with it. A strata title is the title for a subdivided parcel usually found in condominiums or high-rise buildings whereas a master title relates to an individual title on which a high-rise building is constructed pending issuance of strata-titles to buyers.
III. Land Ownership
There are essentially three types of land ownership in Malaysia:
Freehold property for which ownership is in perpetuity.
Leasehold property for which ownership is based on a 99-year lease or less.
Malay reserved land which are reserved for Malaysia.
In regard to leasehold properties, application can be made to State Authorities for lease extension.
IV. Restrictions in interest
Certain properties come restrictions in interest endorsed on the land title. For instance, it can be stipulated that the land cannot be transferred, leased or charged without the consent of the State Authority. In such a situation, the required State Authority consent is usually made a condition precedent before a sale and purchase can be completed.
V. Encumbrances
A property come with encumbrances such as caveats which will impede the transfer of the said property. The caveat would have to be removed before a transfer can be perfected.
VI. Legal Fees
The legal fees chargeable by solicitors for sale and purchase of properties are based on a prescribed scale.
VII. Stamp Duties
The stamp duties to be levied on sale and purchase of properties are based on a prescribed schedule under the Stamp Act.
VIII. Real Property Gains Tax
Real property gains tax (RPGT) for property sales are chargeable based on the prescribed rates under the RPGT Act.