What You Need to Know About Malay Reserve Land and Bumiputera Land (Part 2)
Bumi lots are least considered by investors because their market is restricted and price appreciation is considered to be the slowest among the different land titles.
Bumiputera Quota and Bumiputera Discount
The Bumi Quota regulations under the Malaysia New Economic Policy (NEP) in the 1970s were introduced as a measure to increase Bumiputra shares in real estate through a mandatory minimum quota of 30% and a minimum 7% discount (Bumi Discount) on property.
The quota was implemented to encourage more Bumis to own houses and promote greater interaction among the various ethnic groups of Malaysia.
Under Malaysian law, State Authorities have full control of all land matters, hence Bumi Quota regulations fall under the State Government’s jurisdiction, differing from state to state. For example, Federal Territory of Kuala Lumpur has the Bumi Quota set at 30% and the Bumi Discount at 7%.
It is also mandated that any lot or unit located within the quota of the property development in Federal Territory would be endorsed as a Bumi lot. In Melaka, for instance, the Bumiputra residential quota is set at 60% and the quota for commercial properties at 35%. This quota is implemented irrespective of location within the state of Melaka.
The Bumi Discount ranges from 7% to 15% in some states. Best to check with the property developer before purchasing. Another thing to keep in mind, these discounts are only valid for new purchases directly from the property developers, and not for sub-sale units. It is important that we are informed about the attributes of the various land titles in Malaysia.
Buyers who are looking to purchase properties should always ask developers if their properties are endorsed as Bumi lots or are on Malay Reserve Land. Always check with the Land Office for various matters regarding the property before you make a decision to purchase.