Among the major contentious issues — the RM40,000 monthly income requirement

by NUR HANANI AZMAN / Pic by TMR FILE PIX

THE number of applications for the new Malaysia My Second Home (MM2H) programme to be re-introduced in October may drop dramatically due to tougher entry requirements.

Among the major contentious issues — the RM40,000 per month income requirement for applicants who wish to relocate here.

TEG Media CEO Andy Davison said approved applications may drop down to a few hundred a year unless the planned new rules are changed.

“We think only 5% of our clients over the last 19 years earned over RM40,000 a month. Some people who qualify will be put off by investing RM1 million in a declining asset,” he told The Malaysian Reserve (TMR) in an email reply.

TEG Media, previously known as The Expat Group, is an approved agent for the MM2H programme.

The MM2H programme, first introduced in 2002, allows foreigners to purchase property and reside in Malaysia on a longterm basis.

It was temporarily frozen in August 2020 for a review by the Home Ministry and the Ministry of Tourism, Arts and Culture (Motac).

Home Ministry secretary general Datuk Wan Ahmad Dahlan Abdul Aziz recently said new applicants must reside in Malaysia for a cumulative of at least 90 days in a year.

“Participants must have an offshore income of at least RM40,000 a month compared to RM10,000 previously,” he said.

Davison said very few retirees make RM40,000 a month and those who do would probably choose a more developed country to retire.

“Most of those who join the programme while still working would not be able to meet the new rules about spending 90 days a year in Malaysia. Other countries where people buy second (holiday) homes do not require people to spend so much time in their country.”

Davison also said the drop in number of people applying for the visa will reduce demand for new properties.

“If they also insist that existing MM2H visa holders comply with the new rules, many will be forced to cancel their visas and sell their properties.

“We have assisted many applicants from developed countries, but very few have RM40,000 monthly income,” he added.

According to Davison, many of the MM2H property buyers came from China as they were heavily targeted by Malaysian property companies and many offered the visa as part of the purchase package.

“We estimate not more than 30% of the approved applicants (total approved is around 45,000) actually relocated here.

TEG Media’s last survey of English-speaking visa holders who moved here revealed that 60% had purchased homes here.

“Frankly, if the government wants to minimise the programme and just have a handful of visa holders that is their decision.

“I am just surprised they would do that when the economy is struggling after the pandemic and the programme is known to contribute billions to Malaysia. My bigger concern is that they plan to enforce the new rules on existing visa holders,” he said.

The announcement stated they have one year to comply with the new rules, so it is not clear if that is one year from this October relaunch date, or when their current visa expires.

“If it’s one year from this October, we can expect a lot of departures next year.

“In summary, applying the decision to people who are already living here with the visa will be bad for Malaysia and (will) have a negative impact on the economy. We very much hope the government will reconsider this decision,” Davison said.

Meanwhile, MM2H Consultants Association president Anthony Liew said if the requirement is competitive and attractive, foreigners may still consider Malaysia their second home because the country is a good place to live.

“Due to the high requirements, I don’t have an optimistic rate. Perhaps less than 10% from the number of previous applications,” Liew said.

“Development targeting foreigners will be affected badly. Because if they (the foreigners) are not interested in the programme, they won’t buy the property. People lose confidence with the government policy,” he told TMR.

From his observation, the majority buyer of MM2H is from China because the Chinese will always invest in property.

“For new applications, besides mainland China, I would think of Hong Kong. As quite a number of them would like to move to Malaysia before the new terms are out,” he added.

Echoing similar sentiment, Malaysia-China Chamber of Commerce (MCCC) view such change as untimely and will have adverse impact on the intended result of relaunching of this programme.

“It is especially unfair to apply new ruling to the existing MM2H participants when they renew their passes. It is more acceptable if the new requirements are only applicable to new applicants.

“This programme is not unique to Malaysia, many countries have similar programmes for the same reason,” it said in a statement.

While MCCC believes that this programme may be useful and relevant for Malaysia, however, the focus now should be to quickly ramp up vaccination and achieve herd immunity, so that businesses can be restarted.

“The MCCC believes that now is not the right timing for revising upwards the terms and conditions for MM2H application. Instead, the government should formulate more benefits and favourable terms for local and foreign capital to be involved in the revival of our postCovid economy.”