A Step-By-Step Guide To Buying A Heritage Property In Penang
Buying a property in Penang's UNESCO Heritage Zone is a wholly plausible proposition and potentially profitable as well. According to Mark Saw, executive director of Knight Frank’s Penang Branch, because the supply of heritage properties is finite, property values of buildings have inevitably increased.
"This has led to the heritage properties situated within George Town World Heritage Site (GTWHS) showing a substantial increase in property prices and rental over the last decade as the area transformed from an abandoned city centre into a revitalised city centre offering a mix of cultural and tourism activities as well as a mix of F&B outlets," he says.
As for advice for buyers keen on purchase a heritage property, Saw recommends that buyers should do their homework on their desired property before proceeding. "Check the building's heritage status, seek expert professional advice, consult architects and work together with the local heritage authorities before buying or doing any restoration on the heritage building," he states.
"Take your time to thoroughly carry out research before investing, spend time to check out the neighbourhood to be sure the area is somewhere you would live as the heritage areas tend to be much quieter at night. The investment should be love at first sight as the journey will be a labour of love."
HOW TO PURCHASE
To distil the buying process, Saw shares a step-by-step chart to purchasing a heritage property which is the same for local and foreign buyers.
ADDITIONAL CONSIDERATIONS FOR FOREIGN BUYERS
For foreign buyers, some things to consider before committing:
1. Properties foreign buyers are not allowed to acquire:
- Terraced house under the category of low and low-medium cost
- High-rise property under the category of low and low-medium cost
- Properties built on Malay reserved land
- Properties allocated to Bumiputera interest
- Land issued by the sale order under Section 256 (Application to court for order for sale) and 260 (Application to land administrator for order for sale) National Land Code
- Land issued by the Sale Order under bank auction
2. Payment Approval is 3 per cent of value property acquisition for foreign purchase.
3. Foreign buyers are allowed to buy the following properties:
Note: Under Penang Home Ownership Campaign (HOOC) until June 2022, the Penang Government has dropped the minimum price for foreign buyers for stratified properties to RM800,000 on the island and RM 00,000 on mainland. Meanwhile for landed properties, the minimum price has been reduced to RM1.8 million on the island and RM750,000 on the mainland.
Buildings within the gazetted Unesco Heritage Zones have a stringent criteria controlled in place in order to preserve the historically value and maintain the uniqueness of the city. As a result, all building owners are required to follow the guidelines in place whenever they wish to renovate or upgrade their properties.
For the purpose of conservation and development of Penang heritage property there are four categories as follows:
The changes of both external and internal building become challenging factors where they have to meet a certain standard and requirements by the local authorities.
Special expertise is required to replace materials on the building façade leading to a higher restoration cost. Maintenance of the buildings is also not cheap as the buildings are old and require regular checks.