From Kota Kinabalu to Sandakan: A Complete Guide to Buying Property in Sabah as a Malaysian or Foreigner

Buying property in Sabah is an exciting prospect whether you are a Malaysian from the Peninsula looking to relocate or invest, or a foreigner drawn by the state’s
remarkable natural beauty and relative affordability. But as with any property market,
particularly one with its own unique legal and administrative framework, the process
requires careful navigation.

This guide walks you through everything you need to know from choosing the right location to understanding the legal restrictions, financing options, and the practical steps of completing a purchase.

Before diving into the how, let us briefly revisit the why. Sabah offers something
increasingly rare in the Malaysian property landscape a major urban centre (Kota
Kinabalu) that remains genuinely affordable by comparison to Peninsular cities,
surrounded by one of the world’s most spectacular natural environments.

For Malaysians, Sabah represents an opportunity to own property in a growing market at prices that have not yet reflected the state’s full potential. For foreigners, Sabah offers a combination of English-language accessibility, stable government, and a lifestyle proposition beaches, rainforests, diving, and mountain trekking that few places in the world can match.

Image from: Sabah Travel

If you are a Malaysian citizen, purchasing property in Sabah is broadly straightforward, though there are a few state-specific regulations worth understanding.

Sabah, like Sarawak, has additional layers of property ownership regulation compared
to Peninsular Malaysia. Peninsular Malaysians purchasing property in Sabah may in some cases require state consent, particularly for agricultural land and certain categories of Malay Reserve or Native Customary Rights (NCR) land. It is essential to engage a local Sabah-based lawyer who understands these distinctions.

Malaysian citizens can access standard housing loans from all major Malaysian banks
for Sabah properties. Margin of financing, interest rates, and loan tenure are governed by Bank Negara Malaysia guidelines, so the mechanics are familiar. What sometimes catches buyers off-guard is that some banks apply stricter valuations to Sabah properties than equivalent assets in Peninsular Malaysia, which can affect the loan quantum offered. Getting an independent valuation before submitting your loan
application is strongly advised.

Stamp duty in Sabah follows the national tiered rate structure. For properties priced up to RM 100,000, the rate is 1%. From RM 100,001 to RM 500,000, the rate is 2%. Above RM 500,000 it is 3%, and for properties above RM 1,000,000 the rate is 4%. Legal fees for sale and purchase agreements are calculated on a similar sliding scale. Budget approximately 3% to 4% of the purchase price for total transaction costs, inclusive of stamp duty, legal fees, and valuation costs.

Image from: The Edge Malaysia

Foreign buyers face more restrictions in Sabah, as they do throughout Malaysia, but
the market is not closed to them. Here is what you need to know.

As of 2026, foreigners wishing to purchase property in Sabah are subject to a minimumpurchase price threshold. This threshold is set by the Sabah State Government andhas been periodically revised. Buyers should confirm the current threshold with a licensed Sabah property agent or solicitor, as these figures are subject to change. In recent years, the minimum has typically ranged from RM 500,000 to RM 1,000,000 depending on property type and location.

Not all property categories are open to foreigners. Agricultural land and properties carrying Malay Reserve or Native Title designations are generally not available to foreign purchasers. Foreigners are typically limited to stratified commercial and
residential properties condominiums, serviced apartments, and commercial suites within approved developments.

Malaysia’s My Second Home (MM2H) programme is available to foreigners wishing to obtain a long-stay visa linked to property ownership or financial asset thresholds. Sabah also operates its own variant of this programme Sabah My Second Home (SMM2H) which has different qualifying criteria and offers certain advantages specific to Sabah. Foreigners seriously considering a property purchase in Sabah should explore both options with a licensed immigration consultant.

Image from: SuriaGroup

Before committing to any purchase in Sabah, ensure you have verified the land title
type and confirmed there are no restrictions on your intended use. Confirm the
property’s compliance status with Sabah’s building authorities. Check whether the
development has obtained a Certificate of Fitness for Occupation.

Verify outstanding quit rent, assessment, and utility payments on the property. And most importantly, engage a locally qualified Sabah solicitor not just any Malaysian lawyer who understands the specific land laws and administrative processes of the state.

Sabah rewards those who do their homework. With the right advice, the right property, and the right timing, buying in Sabah could be one of the most rewarding property decisions you ever make.