This article first appeared in The Edge Malaysia Weekly on June 30, 2025 - July 6, 2025

PROPERTY consultants see minimal impact on the Johor property market from the increase in the various levies imposed on properties purchased by foreigners in the state. The increase takes effect from July 1.

Nevertheless, local property consultant Olive Tree Property Consultants CEO Samuel Tan says the increase of 2% to 4% on the purchase of industrial properties needs to be looked at again.

“In the Johor-Singapore Special Economic Zone (JS-SEZ), manufacturing is one of the targeted sectors. Having to pay a 4% levy on top of the 4% stamp duty will be a hefty burden on investors. This may cause them to stall their investment plans.

“The increased rates need a rethink. The 4% rate should be lowered to show to [investors] that we welcome them as they create new supply chains and jobs for the people. The authorities can gain more revenue from property taxes and quit rent,” Tan tells The Edge.

CBRE | WTW group managing director Tan Ka Leong says the industrial segment — particularly foreign acquisitions of industrial land and large-scale facilities — may experience a short-term adjustment due to the increase in the levy to 4%. “Many industrial properties, especially in well-planned estates, such as those in Iskandar Puteri, Senai or Pasir Gudang, are high in value, often exceeding RM10 million. For foreign investors, especially manufacturers, this sudden hike could affect acquisition budgets and capital planning, prompting temporary delays as they seek internal approvals or funding revisions.”

Nonetheless, Ka Leong believes the impact will be short-lived as Johor’s long-term fundamentals and strategic strengths are expected to sustain investor interest moving forward. “Johor continues to be a highly attractive destination for industrial and logistics players for several reasons. Its proximity to Singapore and access to three major seaports (Tanjung Pelepas, Pasir Gudang and Tanjung Langsat) give Johor a strong logistical edge. Industrial land prices there are affordable compared with those in the Klang Valley and Penang. For instance, recent prime industrial land transactions in Iskandar Puteri have been in a range of RM120 to RM130 psf while in areas like Pulai and Senai they have been around RM60 psf — still below those in Shah Alam (RM180 to RM200 psf) and Kapar (RM120 to RM140 psf).”

Ka Leong adds that projects like the Johor-Singapore Rapid Transit System (RTS), the expansion of port facilities and improved road connectivity will further enhance Johor’s long-term attractiveness. He says supportive policies by the state government, including existing incentives will continue to attract foreign direct investment.

The state government will be implementing major operational upgrades and to further improve efficiency, it will invest RM1.55 million in upgrading the portal for the registration of land, including e-submission, e-title search and e-consent. Private title search for strata properties will be expanded to landed properties as well.

An allocation of RM500,000 will be made for the e-system to expedite the SBKS (surrender and re-alienation process), variation of express conditions, subdivisions and name transfers. The time taken for the SBKS will be shortened from 510 to only 53 days. This is expected to be implemented by September.

“To be fair, these fees have not been revised since they were implemented about 10 to 20 years ago. The fee revision is to improve efficiency and transparency in land dealings. More counters will be opened to service the public and new positions will be created. The processing capacity for strata title matters will be increased from around 120 folders a day to 600. The time taken to approve the registration of land titles will be shortened to 21 days from 70 now. For other dealings, the time will be reduced from 14 days to seven,” Tan says.

He believes the impact will be temporary due to the positive sentiment on various current and upcoming catalytic projects, including the RTS Link Project, electrified double-track project, JS-SEZ, Forest City Special Financial Zone and the possibly revived High-Speed Rail.

Tan urges a delay in the implementation timeline, which was announced in June and is to be implemented on July 1. “A more measured approach with proper stakeholder consultation would maintain investor confidence during this pivotal period for Johor’s economic transformation. Investors who [had] already budgeted their expenses for their investments may be disgruntled by this sudden increase.”

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