Guys, can share your views on leasehold landed terrace?

This post has been edited by MAC5: Mar 24 2021, 11:38 PM

Just like car...
Can we buy Perodua? Proton? Still can buy la...
So what you want to buy it for? Brag? Investment? Just to buy....?

From investment angle. In term of capital appreciation.

Leasehold or freehold should not be the only deciding factor when it comes to property. Location wise is important as well, a lot of leasehold property now is selling at millions. Look the the location and neighbourhood, the surrounding convenience, the quality of the home. These are what makes a property valuable.

always free > lease. try to find new freehold in KV matured area, you will see how limited choices you have.

but yeah, location plays a vital part too. freehold in ulu place wont get any appreication.

buying a property with fewer lease year also impact your mortage.

Well
Personally... It's FH all the way.. landed..
BUT.. there's but... If LH location is strategic & the price is okay. Why not... As long it's over 50y balance.. 99y even better...

So do your own investment profile...
So long it makes money in short term....then it should be fine.
Where you buy?

what happen after lease period over.
state can take back the land, what about our house?

About leasehold properties, a lot of people always wonder this "what about gov take away my property"...

Well let me tell u, if the state wants to take back your property, it can be as soon as vp.

If your property is freehold, state cannot take away the properties? Surprise! They still can take it away when they want.

Also, leasehold tenure can be extended, so why not extend it if it goes down below 50 years to prevent the outcome of gov taking away your leasehold properties without compensating you?

That being said, i am going for freehold landed but if within the same area, same sizes, almost same workmanship, almost same township planning but freehold landed costs me more than 100k then i might give leasehold landed a hard consideration.

I have heard a few places lease 99 years expired in msia, but since the area, although on main road, has no prospect other than residential, hence it was renewed.

I do feel it is luck based, and cannot just dismissed. Dun listen sales too much, gauge your feeling about the place.

No difference. It can be renewed. I see many rich people buy leasehold semi d and bangalow happily.

I see many freehold poperty size much smaller compare to leasehold and it is cheaper. You have to look at workmanship too.

I think property company is using freehold as a marketing tool, and people thought "free"hold means you are own it and "lease"hold means you lease it, actual fact both you own it.

This post has been edited by kelvinfixx: Mar 25 2021, 09:37 AM

Even FH, gomen can take away the land using the NLC if not mistaken.

Plus, u ain't gonna live beyond 99 years anyway. Your next gen may not even want the property if not staying in MY.

Yes especially now under state of emergency government have the right to possession of your property

Compensation or not it will depends whether they are willing to pay is also another story as it can be lower than market

Buying property number 1 is location, location and location and the follow by purpose to monetise, build and only land titles comes in next

In fact buying leasehold can be as cheaper as 30% or more

The only question you have to ask will the banks willing to loan you money the buy the property unless you have the means buy it outright as cash borrowings

No history of leasehold property failed to renew in Malaysia.

Regardsless of freehold or leasehold, government will take back the land if needed

renewed, and government can "take" (compensate) your freehold house deem fit, not only leasehold.

This post has been edited by kelvinfixx: Mar 25 2021, 09:40 AM

I once bought a leasehold landed from developer in the 80s. When I sold the house a few years later, it took more than a year to get the state consent for the title transfer and get my money. I don't know if the situation has improved since then.

usually 3-4 months only

Try to see the landed house at PJ , Kota Damansara and Sunway...

When it comes to Msian property, location and target market matters more than whether leasehold/freehold because

1) gahmen can easily tell you to give up FH land if they really wanted it, under LAA 1960 https://www.mondaq.com/landlord-tenant--lea...20of%20Malaysia.
2) most leasehold is at around 99 years, except in Sarawak usually they do 60 years because 99 years got higher premium, but renewal is usually easy because most properties are built on land that's deemed as useful only for residential so unless you're an immortal vampire it's unlikely you'd have issues with leasehold expiry in your lifetime

This post has been edited by DragonReine: Mar 25 2021, 11:44 AM

my freehold landed appreciate faster then leasehold. leasehold appreciate but slowly sometimes feel like not that good of an investment.

Leasehold 99 yrs.

Federation of Malaysia baru 58 yrs old....

always go for freehold if money is not an issue, but only applicable to same or similar location.

Don't compare the FH kampung area to LH town area.
Or compare the FH properties with no/less amenities nearby, to LH properties but near to amenities

This post has been edited by chainyong: Mar 25 2021, 11:46 AM

Location is more important than LH or FH

Right location LH appreciate more than FH area that nobody wants.

LH with 99years has too long tenure to be worried about.

30 years later also don't know what will happen on that area, don't need to worry 99 years later.

99 years later, we also no longer here.

around 6month or less

Some people I know go beyond their means to buy freehold landed just so have a little bit more bragging rights.

Meanwhile Damansara leasehold landed owners just smirk at these cute people...

Bandar Rimbayu is an example. The entire township is leasehold whereas neighbouring township-Kota Kemuning is freehold.

It does not matter FH or LH.
As long as the LOCATION and PRODUCT are good, just go for it.

well many look low on u when own LH properties...
just like how people look low when u go use public transport for work/school etc.
or uses some cheapo P1 or P2 cars

Also not to forget the state is not obligated to renew even if you have money. And the state is not obligated to compensate you after the lease has expired. If the owner has a say then might as well make it freehold. The notion of leasehold means the state has the final say. Not you.

Just imagine you go lease a car from BMW. After 1 year must they compensate you if they wanna take back? Can you stop force them to renew? Remember it's a lease.

As for freehold, they can take your land but they must compensate for taking over your land.

If I am TS, I will buy only freehold. And go condo freehold if you must buy in good location but landed expensive. Never buy freehold in bad location.

This post has been edited by Ayammachiamboss: Mar 25 2021, 06:35 PM

If you do buy leasehold, remember to dispose the property after 25 years and upgrade to freehold. Because there are many in Malaysia who still believe lease guaranteed can be renewed. When 99 lease expired their kids will cry father cry mother "PA ma, I thought you said can renew this double story Kota Damansara house wan? Why? Why did you leave me with nothing?"

This post has been edited by Ayammachiamboss: Mar 25 2021, 07:00 PM

Not relevant statement. Desa Park City is not leasehold

My mistake. KD then.

Tell me how many shop houses, building, land and petrol stations which have freehold status that had to make way for LRT station and line construction?

The state can't take away your land if its freehold? Think again.

FH or LD...
Gomen can take over our house/land... No matter what.. in the name of development...

Remember the pasar seni MRT case.... 🤭
Many disagree... In the end needed to accept it...

Those who said no difference. When LH expires need to pay for the term renewal right. Also i read that the premium is not small fees too

FH or LH, govt needs to compensate if they want to acquire your land for public purposes. Your statement sounds like the govt will not compensate LH owners. As long as the lease still active, the owner has right to be compensated. The LH period will usually outlast us. So, you will not see the day the govt wants to take back your land.
What about your kids? Your kids should be capable and independent enough to buy their own properties.

You should train your kids to be capable and independent enough to buy their own properties. You do not owe your adult kids a living.

If can make kids’ life easier, a good thing too. Imagine how tough for future generations to buy a landed property.

Which part of Damansara is leasehold area?

Your statement is right that if the government takes your land when the lease is active, then you should be compensated. But many think that when the lease expires the government must compensate them still. That is a very careless thought.

My kids? Hmmm. I don't know what should I leave them yet. But whatever the decision is, why get a lease just for 10% discount?

Actually I won't want my kids to be spoilt. But even if my kids are capable of handling their finances well, why should I get a land only to lose it 99 years later? If I leave it to my financially literate kids, maybe they can put the land to better use. That's better than losing the land so that some 2 ringgit shell company can buy it for cheap.

Well. It also depends on that particular area.

If the area you want to live in is 100% leasehold, then you have no choice. Likewise, in future, people who love living in this area also has no choice but to buy leasehold property also.

But if that area has both freehold and leasehold, then perhaps it is wise to select freehold if price range is not too much.

bungalow plot but leasehold left 77 yrs... how ah? rm3mil+ land saja, have to bina own haus

Perhaps what is interesting is there is no leasehold high rise in Malaysia which is 80-90 years old yet.

Wondering what will happen to leasehold high rise when it is 80-90 years old.

no matter LH or FH , after 80 years, I don't think the high rise building still safe to stay, especially now all the high rise building built by foreign workers, some even less than 5 years already many problem, some just VP already come with waterfall

If you really want to pass the property to your kids, I dont think the freehold condo is a good idea, after 60 years i think your kids also don't want to stay in that condo, high chance to become a dangerous building

For high rise, it is the land underneath matters most.

For leasehold landed, individual owner can apply to renew the lease.

Whereas for high rise, I guess you need to get agreement from all unit owners before you can renew the lease. If one owner does not agree, then cannot proceed. Anyone can clarify this?

In that case, a 60 years old high rise condo can only wait for developers to acquire the whole condo, demolish it and rebuild another new high rise?

if your condo located at a strategic location, it is possible, if not very hard to get developer to acquire.

If the old high rise really dangerous and might affecting surrounding building, government might just demolish it for safety purpose with minimum compensation

99 years can give to three generation, assuming every generation getting their 1st kid around 30 years old

After the lease period over, the owner needs to renew it.
The rate is base on the location of the land.

If you go to PJ old town, you see a lot of vacant bungalows and houses. The reason is most of those houses owner have moved out but the house is not desirable in the market as it is at the very end of the lease. It will depreciate a lot for the buyer.

The renewal rate is between RM60k-250k.

That means if you buy the bungalow at RM1.8mil, you need to add say RM150k cash for renewing the lease within 10 years.

The actual house own value will be RM1.8mil + RM150k* + (time u own the house x 5% of RM150k)**.

*if you borrow the RM150k, then you also need to add interest from the loan.
**Rough way to calculate the loss of gain from interest.

Also, the paper value of the house is RM1.8mil, the bank will only borrow you 1.8Mil at max (which is not likely at all...).

No one who understands this will want to pay ~RM2mil to stay in an RM1.8mil house since there is a lot of property supply in msia...

This post has been edited by chamelion: Mar 25 2021, 11:39 PM

Normally is a strata title. The title is held by a legally appointed representative body. If the owner does not pay, he can be sue and need to pay all interest because he already agrees with the term during purchase.

Does that mean if you do get the approval to renew your lease, you have to pay at least 2 mil for it?

You pay RM2mil from your pocket.
RM1.8 for house and ~RM200k (If you calculate in detail, it might higher) for leasing fee.
Generally, gov allow lease renewal with no issue.

It is also an issue if you want to sell. You have to wait the appreciation of RM200k + the normal loan interest and fee to avoid lost.

This post has been edited by chamelion: Mar 26 2021, 07:50 AM

Thanks interesting to know that after 'owning' the house for 99 years you have to repurchase it when renewing the lease. I thought it is just extending the lease without paying for the house value again.

haha, i dont dare stay in 80 years old high rise building

if before renew price at 1.8m, after you renew it.........market price simply 2m above

I working nearby old town, initial offer by local authorities is 100k renewal, it shock to the resident. end up negotiate till very low price

what was the ending? Renewed lease successfully?

yes, already renewed few years ago

i saw a vacant bungalow lot (not really big) selling at 1m now

99 years extended?

I only knew success, how many years dont know

I kena similar case back in 2009.
Owned a freehold condo with "restriction in interest" in Bkt Jalil.
Needed to get approval from Jab. Tanah & Galian KL before can transfer.
Took quite a few months.

Huh?

Since when you need to re-buy the house?

Just pay the lease extension la... as for his calculation of RM150k to extend the lease.. he pull the number out of thin air..

for example

https://www.edgeprop.my/content/lease-renewal-just-rm1000

Only 1k, not 150k. The owner smile to the sky

Freehold still have "restriction in interest". What is the restriction stated in the Title?

"Repurchase"

Someone is making a joke out of himself.

I don't know that what the guy before me said. Anyway I did a little more research. There are many links saying renewal in Selangor is just 1k as you've shared. But then there is this

https://www.google.com/url?sa=t&source=web&...5oWaWpQ3C4Pi2pn

"Keep in mind that the calculation of the premium rate as mentioned above is for the land itself. It does not include the building constructed on the land. "

Can anyone confirm if during renewal the building has its own premium to pay as well?

chamelion

IF renewal is approved. I can't deny that knowing the renewal is that cheap in Selangor has to a certain extent shed some positive light on leasehold properties, but if you read carefully, if the lease is not renewed or the renewal is rejected, the land is returned to the state automatically.

Also, I am not surprised with the state of things in Malaysia, this 1k thing can be uturned.

In law yes, if authorities refuse to renew they can take back the land. In history never happen before

future always nobody know

That is why in my first post i mention the rate is subject to location.

I think what they meant was the value of building is disregarded ... only market value of land is taken into consideration ... the buildings no need to pay anything to renew one because the law does not care if there is a building on the land or not

But if u extend the leasehold by paying RM1k, you cannot sell the properties, only can stay there or rent out... there’s a caveat on the land, if u want to sell, u still need to pay full premium ...

Just only that, no other description listed.
This adds another hassle when you need to get approval from the KL land office if you want to sell/transfer title.
When you guys are prospecting freehold props, do keep an eye out for this clause.

https://www.facebook.com/tensharing/videos/346646133449440
Just came across this. It gave an idea on how to lease renewal fees are computed.

the last part of the video is similar to the example I gave. It put the buyer in a difficult position, that is why the property is no desirable.

Welcome to PJ property....

What will happen to those paying millions for terrace house in teluk panglima garang in 30 years?

As a property investor with more than 10 landed properties over a period of more than 20 years time frame.
I would say the location, concept, and township potential are more important than leasehold/freehold.
I own both leasehold and freehold landed properties.
I can affirm that some of my leasehold properties yield better returns ( rental and capital appreciations) than my freehold landed properties.

Developers nowadays are putting a premium pricing on their freehold properties compared to leasehold properties.

One example, a freehold landed property I was considering is priced 200k-300k more than a similar size (built up and land size) leasehold landed property.
One has to pay extra 200k-300k money to get a freehold property. On top of that, not to forget, with a bigger loan is more interest payment. A 300k more loan principal could cost an average 12k per annum worth of interest payment (assumption interest rate is 4%)

At the end of it, I went with the leasehold property because I feel the area the leasehold property is located has a greater long-term potential.
The cost of renewing the lease in Selangor is $1k (if ones plan to continue to stay or pass on the next generation). If one plan to sell after 10-30 years, there is always an option to renew the land lease back to 99 years. One only needs to pay the number of years difference between 99 years - remaining years left on the lease. (don't need to pay the full 99 years lease premium) . The land lease renewal premium is much lower compared to the premium price and its corresponding interest of a freehold property.
So the choice is between paying the freehold premium price upfront + interest vs land lease renewal premium if and when one decides to sell.
If the property is mainly for own stay and passing on to next generation, no need to worry so much about the land lease premium lah (to be honest)

My advise to folks, just buy a property that you like and can afford.
Leasehold vs freehold is not the be-all end-all. Location and township potential are more important.

This post has been edited by harrywilsome: Mar 27 2021, 11:35 AM

Just add on something quick. When you buy a leasehold property, do take note. 99 years do not mean you have 99 years after VP. Sometimes you get only 90 years because the developer takes 9 years to plan, sell, build and transfer to you. Do note the title or SPA state how many years left. Normally will have expiry date.

Also do take note for renewal typically different states got different rules on that. Yes leasehold typically should be 20 to 30% or more cheaper than freehold for similar projects.

This post has been edited by joeblow: Mar 27 2021, 10:14 PM

Great sharing.

This post has been edited by MAC5: Mar 28 2021, 11:16 PM

edit

This post has been edited by 47100: Mar 28 2021, 11:32 PM

Lakefield Boleh ?

Is it feasible to buy commercial leasehold individual shoplot? From what i have checked with land office, the premium to renew is 75% of market value of the land as compared to the residential leasehold which is 25% of market value of the land. (as per guideline in Selangor State Government)

If we bought leasehold shoplot at RM2 mil now, Assuming after 30 years, the market value of shoplot is RM6 mil and the market value of land is RM3 mil (assume half of market value of the shoplot).

If we extend it for 30 years back to it original 99 years, the premium we need to pay is almost RM477k (calculated based on formula : 75% x RM3 mil / 99 years x 30 years [no of extension years] x 70% [assuming we have discount 30% if we made full payment in lump sum])

If we divide RM477,000 / 30 years, it gives premium of RM15,900 per year or RM1,325 per month.

Basically, if leasehold commercial land is appreciate more, the more premium we need to pay.

If my calculation is not correct, please do comments

This post has been edited by scongi: Apr 2 2024, 03:59 PM

Big hassle.

gomen policy could change; discount may not be available e.g umno regime.


This post has been edited by icemanfx: Apr 2 2024, 05:13 PM

leasehold does not matters for commercial . 15 years is more than enough to pay off the investment + interest. Rest is just pure profit the longer you can hold. If flipping also concern more if the bull comes or not. Resident is the opposite. After 15 years occupation, value at most holding inflation, let alone growth. Even bull comes also lags freehold when comes to margin.

I will think leasehold commercial will affect more our 2nd or 3th successor (let says after 60-70 years) as the lease may less than 30 years when the property transferred to them...There is big money to pay for the extension..

It also depends if you purchase the leasehold commercial, the pricing is really cheaper compare to surrounding freehold and also the location also an important...

Leasehold, if not mistaken, there are option that you do not need to pay premium now to extend the lease, only need to profit sharing with the state govt/local council upon selling.

As for leasehold commercial, if its decent location and generating rental profit stably, there are no need to sell it, hence leasehold, in most cases, make more sense for commercial rather then residential.

Residential is for ppl to live, you might want to sell it in 30/40 years due to the condition of the property....for commercial, no matter what the condition, if its at right place/right sizes, its always got demand.

Is true we dun need to sell it for leasehold commercial for decent location and good rental, just there is still a big money to pay to extend the lease when it expires...of course as what I say it only affect our 2nd or 3rd successor after 60-70 years..

Of course this is up to personal choice because some may not think too far as future is very hard to predict.....But based on current law and policy, there is disadvantage of leasehold commercial as compared with freehold commercial in long term

You missed my 1st paragraph. There are option to extend the lease without paying any $$, its by profit sharing with the govt when you sell the property.... Technically you do no need to outlay any$$ to extend the lease.

But of course the actual procedure might varies, and might have many restriction therefore this is just for education purposes lol

This post has been edited by Rinth: Apr 3 2024, 10:34 AM

Noted. Do you know how much profit sharing they offered?

Btw, I would think if we sell the leasehold commercial with short lease left, the market value wont be high as the buyer will factor in the extension premium and they must buy in cash as the bank won't finance leasehold less than 30 years. This will affect the selling price. Just my opinion.



This post has been edited by scongi: Apr 3 2024, 11:27 AM

Went to land office last year. I learned that it is possible to renew the lease at minimal fee but we cannot sell it, good for own stay. When you want to sell it after that then need to pay according to market price including the years that you enjoyed the minimal fee.

Also, sometimes land office have special promotion (lower rate..etc). The only problem is they don't advertise it.

From what I have checked they normally give 30% on the lump sum payment...It means also they offer instalment but I no sure as I didn't ask more details on how long the instalment...

This post has been edited by scongi: Apr 3 2024, 11:25 AM

leasehold selling is hard..

nowadays many new launching landed property also leasehold