'New rule makes MM2H property costlier for applicants'
Published on: Wednesday, June 19, 2024
By:
FMT, Predeep Nambiar
A condition that requires MM2H agencies to furnish the government with a bank guarantee worth RM200,000 is excessive, an agent said, adding it has become much harder to secure new customers. (Facebook pic)
PETALING JAYA: The new Malaysia My Second Home (MM2H) rule requiring prospective applicants to purchase property worth at least RM600,000 has led to concerns among the programme’s consultants.
MM2H Consultants Association chief Anthony Liew said the primary concern was that the property requirement would make it more costly for applicants to secure a long-term stay visa.
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Liew said under the entry-level five-year “silver” plan, prospective applicants would have to purchase one property worth at least RM600,000, and place US$150,000 (approximately RM710,000) in fixed deposit, which translates to a minimum financial commitment of more than RM1.3 million.
Applicants were previously required to place RM1 million in fixed deposit, a condition that was already widely panned and resulted in a decline in applications.
Liew said while the fixed deposit sum has now been lowered, the mandatory property purchase, and the length it has to be held, have drawn much concern.
“Applicants are now required to hold on to the purchased property for at least 10 years, which is excessive for those under the silver tier, since this is a five-year visa.
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“The long holding period could deter applicants who might not want to commit to such a long-term investment,” he told FMT.
He also questioned if the minimum RM600,000 property price tag applied to states such as Selangor, Kuala Lumpur and Penang.
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This is because Putrajaya previously fixed minimum prices of at least RM1 million for foreigners to purchase homes in the Klang Valley, and RM800,000 for an overhung high-rise property on Penang island. This threshold varies according to location and type across the different states.
Liew nonetheless acknowledged several positives in the new criteria, including the reduction of the minimum age for applicants to 25, which he said will attract a larger and younger group of potential MM2H participants.
He also lauded the scrapping of the offshore income requirement, saying this will benefit retirees who may no longer enjoy monthly returns. In addition, doing away with the requirement to provide proof of liquid assets has made it less financially burdensome for applicants, he added.
Liew said not allowing MM2H participants across all three categories to apply for permanent residence (PR) however was nothing new.
He nonetheless hoped tourism, arts and culture minister Tiong King Sing would be open to meeting the consultants group over licensing issues affecting MM2H agents as well as on the programme’s new conditions.
As of Jan 31, there are 56,066 active MM2H pass holders. The most recent conditions required applicants aged 50 and above to have liquid assets of RM1.5 million, a monthly income of RM40,000, and a fixed deposit of RM1 million upon approval.
For those aged 35 to 49, the criteria is the same but includes an additional RM50,000 deposit per dependent.
Under the new rules, MM2H runs under a three-tier system: Platinum, Gold, and Silver, each with different financial requirements and benefits.
The Platinum tier requires a fixed deposit of RM5 million, while the Gold and Silver tiers require RM2 million and RM500,000, respectively, with different visa durations and renewal options.
RM200,000 bank guarantee for MM2H agencies too much
Meanwhile, another MM2H agent who spoke on condition of anonymity said the latest rules were costly for agencies, as they are now required to furnish the government with a bank guarantee worth RM200,000.
With only about 200 agencies left in business, half the number that operated during the pre-pandemic years, Liew said the imposition of new conditions gave a distinct impression that the government was looking to further downsize the industry.
With very few MM2H applications post-Covid-19, coupled with high-entry costs for the programme and other long-term stay visas, these agencies are no longer able to secure too many new customers.
“Some of these firms are nearly bankrupt. So RM200,000 is too much,” he said.
The agent said the original MM2H rules were better, with applicants only required to place RM300,000 in fixed deposit and with no compulsion to purchase properties.
“Those coming from the US and Europe typically don’t buy properties but prefer renting,” he added.
He also said it was illogical to insist that those on the five-year silver visa programme purchase and hold on to their properties for 10 years, especially since these do not involve government housing projects.
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