JB Resale Wall: Options for Foreign Condo Owners

Dense high-rise towers and traffic in Johor Bahru — Johor Bahru city centre. Photo: Ven Jiun (Greg) Chee on Unsplash

At a glance

The rule: Foreign-owned units bought below RM1m can generally be resold only to Malaysians
Who it hits: Foreigners who bought sub-RM1m units through a developer's special approval
RPGT for non-citizens: 30% of the gain in years 1 to 5, 10% from year 6
Buyer's retention: 7% of the price, paid to the tax office within 60 days
Rental income tax: 30% flat on net Malaysian rental income for non-residents

What the resale wall is

The resale wall is Johor’s rule that a foreigner who bought a home below RM1 million, under a developer’s special approval, can generally resell it only to a Malaysian. Johor’s normal floor for foreign buyers is RM1 million. Developers can get approval to sell cheaper units to foreigners to clear unsold stock, but that approval does not pass on to the next foreign buyer. The state’s stated aim is to keep sub-RM1m homes affordable for locals.

In April 2026 the New Straits Times reported the case of a Singaporean who paid RM650,000 for a JB apartment and found he could sell only to Malaysians. A Johor property consultant quoted in the same report called the situation a “liquidity trap”: easy to enter at a low price, hard to exit.

Why it matters more for high-rise units

The rule bites because the Malaysian buyer pool for these units is thin. According to the same NST report, Malaysians in Johor with more than RM500,000 to spend generally prefer landed homes, so a RM600,000 to RM900,000 serviced apartment in the city centre competes for a small group of local buyers.

The supply side doesn’t help. Many of the completed towers between JB Sentral and Bukit Chagar have hundreds of units listed at once. On 12 October 2026, PropertyGuru showed 1,807 sale listings and 1,109 rental listings tagged to Twin Tower Residence alone. Some of those are duplicates posted by several agents, but the scale tells you how much competition a seller faces.

Option 1: sell to a Malaysian buyer

Selling to a Malaysian is the only way out today if you want cash, and it usually means pricing below the foreign-buyer market. The consultant quoted by the NST said discounting to attract Malaysian buyers may be the main choice for now.

Before you list, find out three things. First, what similar units have actually transacted for, not what they are listed at. Second, whether local buyers can get bank financing on your unit type; ask a mortgage banker before you set a price. Third, what you will owe in tax, which the next section covers.

RPGT and the 7% retention when you sell

A non-citizen pays Real Property Gains Tax of 30% on the chargeable gain if the property is sold within five years of buying, and 10% from the sixth year onwards. There is no exemption year for foreigners.

Years held	RPGT rate for non-citizens
1 to 5	30%
6 and later	10%

The gain is the sale price less the purchase price, with deductions for costs such as the original legal fees and stamp duty on the transfer, and the agent and legal fees on the sale. Loan interest and furnishing are not deductible.

The buyer, through their lawyer, holds back 7% of the price and pays it to the tax office within 60 days of the sale. That 7% is a deposit against your tax, not the tax itself. On a RM700,000 sale, RM49,000 is held back. If your actual RPGT is RM15,000, you claim the RM34,000 difference back after assessment, which can take months. From the 2026 year of assessment, the buyer can remit a lower deemed-assessed amount instead, if you notify them first. Ask your lawyer to set this up before completion so less cash is tied up.

Option 2: rent it out

Renting gives you income while you wait for a better exit, and the area around the RTS has tenant demand from people who work in JB and in Singapore. On 12 October 2026, two-bedroom units of 882 sq ft at Twin Tower Residence were advertised at RM3,000 to RM3,500 a month. Our RTS rental yields page has asking rents and gross yields project by project.

The cost is tax and running expenses. As a non-resident you pay a flat 30% on net Malaysian rental income, after deducting things like maintenance fees, sinking fund, assessment and quit rent, insurance and agent fees. Tenants don’t withhold tax, so you file a return yourself. Renting doesn’t remove the resale wall. It only makes waiting cheaper.

Option 3: hold for the long run

Holding past the fifth year cuts your RPGT rate from 30% to 10% of the gain. That alone can be worth more than a small price rise. If you bought in 2022 and can wait until 2027 or later, run the numbers both ways before you sell.

The other argument for holding is that prices could rise towards the RM1m line. The NST report mentions the Johor-Singapore Special Economic Zone as a long-term catalyst, and the RTS Link is due to open in February 2027. We can’t tell you whether either will lift values near Bukit Chagar, and nobody has announced a change to the resale rule. Hold if the rental income and the lower tax rate make sense on their own.

Option 4: sell and upgrade

Upgrading means selling the sub-RM1m unit to a Malaysian and buying a unit priced at RM1 million or more, which falls under the normal foreign-buyer rules and can in principle be resold to another foreigner. It also gives you a wider exit later.

The cost of switching is high. You pay RPGT on the sale, then 8% stamp duty and Johor’s 3% levy (minimum RM30,000) on the new purchase, plus legal fees and state consent again. Our cost calculator shows the buying side. Upgrading suits owners who want to stay invested in JB for many years and accept a discount now in exchange for liquidity later.

MM2H owners have a separate rule. Property bought to meet MM2H requirements must be held for 10 years, and the only early sale allowed is one where you buy a higher-value property first.

Which option fits

Your situation	Usually points to
Need the cash within a year or two	Sell to a Malaysian, priced to move
Unit is tenanted or easy to let, held under five years	Rent and hold past year five
Want to stay invested in JB long term	Sell and upgrade to RM1m or above
Bought under MM2H	Hold, or upgrade under MM2H rules

Talk to a Malaysian conveyancing lawyer before you decide. The rules depend on the approval your unit was sold under, and only the lawyer handling your title can confirm who you can sell to. This page is general information, not legal or tax advice.

If you are still deciding whether to buy, read buying property in JB as a Singaporean first, and plan your exit before you pay a booking fee.

Common questions

Can I sell my sub-RM1m JB condo to another Singaporean?

Generally no. Under Johor's policy, foreigners who bought below RM1 million under a developer's special approval can resell only to Malaysians. The New Straits Times reported Singaporean owners running into this in April 2026.

Is the resale rule likely to change?

We have seen no announcement. A Singaporean owner quoted by the New Straits Times proposed a flexible levy, such as 10% on sub-RM1m foreign-to-foreign sales, but Johor has historically resisted loosening the threshold.

How much tax do I pay when I sell?

Real Property Gains Tax for non-citizens is 30% of the chargeable gain if you sell within five years of buying and 10% from the sixth year. The buyer withholds 7% of the price and pays it to the Malaysian tax office, and any excess over your actual tax is refunded after assessment.

Does renting out the unit avoid the problem?

It gives you income while you wait, but it doesn't change who can buy from you later. Non-resident landlords pay 30% tax on net Malaysian rental income.

Can I sell if I hold the property under MM2H?

MM2H property must be held for 10 years. The only early sale allowed is when you upgrade to a higher-value property first, according to MM2H agents' published requirements.

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Sources

Facts on this page were checked against these sources on 12 October 2026.