Circular No. 65/13: Proposed New Guidelines by Johor State Government on Acquisition of Properties by Foreigners

In recent weeks, there have been numerous and various media reports and press statements on the proposed new guidelines on acquisition of Johor properties by foreigners. The proposed new guidelines are designed to cool the overheated Johor property market and curb speculation in Johor properties. However, despite the said media reports and press statements the Johor State Government has yet to issue any written guidelines detailing the specific measures to be implemented. This has led to uncertainty and confusion not only amongst members of the public, both locals and foreigners but also amongst stakeholders in the property market.

The Conveyancing Sub-committee has met up with the PTG on various occasions to give our input on the proposed new guidelines. During our meeting with PTG on 2-8-2013, we had communicated the Johore Bar’s stand on the proposed new guidelines based on the following broad principles:

1. The proposed new guidelines should be for the benefit of the rakyat of Johor.

2. The proposed new guidelines should NOT be implemented retrospectively. We had proposed that the Sale and Purchase Agreement date be the effective date for purposes of implementation.

3. The Johore Bar be given ample notice of the proposed new guidelines prior to its implementation. This is to enable members to advise their clients accordingly.

In view of the fact that, no written guidelines were issued even as we are approaching year 2014, the Conveyancing Sub-committee drafted a letter to the Yang Berhormat Menteri Besar Johor to, again state the Johore Bar’s stand. The letter was signed by the Johore Bar Chairman and sent out on 19-11-2013.

In the interim, the Conveyancing Sub-committee has also received numerous calls from members regarding PTG’s handling of various issues regarding acquisition by foreigners. One such issue relates to PTG’s rejection of applications by foreign purchasers for state consent to purchase properties where the Malaysian vendor had owned the property for less than 5 years.

The Conveyancing Sub-committee had a meeting with the PTG on 3-12-2013 with respect to the above issue. The Sub-committee argued strongly that based on the existing guidelines governing acquisition of Johor properties by foreigners, PTG are bound to accept such applications. Encik Mohammed Ridha Bin Dato’ Haji Abd. Kadir of PTG agreed and has directed his officers to forthwith accept such applications for state consent i.e. by foreign purchasers purchasing from Malaysian vendors who had owned the property for less than 5 years. However, such applications must be submitted on or before 31-12-2013. Members who had such applications rejected earlier are advised to resubmit.

Please be guided accordingly.

The Johore Bar Committee and the Conveyancing Sub-committee will continue to engage the PTG and the Johor State Government on the above matter and other matters which affect members.

We will keep you updated.




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