Leasehold Property Extension or Renewal Premium in Malaysia
Leasehold Property ownership in Malaysia comes with unique considerations compared to freehold. While freehold ownership grants indefinite rights to a property, leasehold ownership means the land is essentially “rented” from the state for a specified term – usually 99 years. As time passes and the lease approaches expiry, property owners must decide whether to extend or renew the lease. This process comes with a cost, known as the Leasehold Property Extension Premium.
In this article, we will explore what the Leasehold Extension Premium is, how it is calculated, factors influencing the amount, state-specific differences, special schemes, example calculations, and the consequences of not extending a lease. We’ll also walk through the application process and offer practical guidance for property owners navigating this often complex procedure.
Leasehold vs Freehold
- Freehold: Ownership is indefinite. Once you purchase the land and property, it remains in your name (and your heirs’) without expiry.
- Leasehold: Ownership is limited to the duration of the lease, typically 99 years. At the end of the lease, the land reverts to the state government unless the owner renews or extends the lease.
Leasehold properties are common in Malaysia, particularly in urban and industrial areas where the government prefers to retain long-term control of land use.
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