Buying property: BUMI lot vs BUMI quota

Hi again homeowners and investors!

Let us welcome the month of June 2024 and we are officially in halfway in the Year of 2024.

Topic for this month is the differences of BUMI lot and BUMI quota, you may have come across these terms while hunting for properties.

What do they mean and how do they affect your purchase decision? 

Here is a brief explanation of these terms and some tips on how to navigate the property market as a buyer.

Bumi lot is a property that is reserved for bumiputera buyers only. Bumiputera is a term that refers to the indigenous or native people of Malaysia, such as the Malays, Orang Asli, Sabahans and Sarawakians. 

Bumi lots are usually sold at a discounted price of 5% to 15% compared to non-bumi lots. However, bumi lots are subject to certain restrictions, such as the need to obtain consent from the state authority before selling or transferring the property to a non-bumi buyer.

Bumi quota is a percentage of properties in a development project that must be allocated for bumi buyers. The bumi quota varies from state to state, ranging from 30% to 50%. This means that developers have to set aside a certain number of units for bumi buyers before they can sell the remaining units to non-bumi buyers. The purpose of the bumi quota is to ensure that bumiputera have access to affordable housing and to promote social integration among different ethnic groups.

Here are some advantages of buying bumi lot/quota:

- You can get a discount on the purchase price, usually between 5% to 15%, depending on the state and the developer.

- You can enjoy lower interest rates and easier loan approvals from banks and financial institutions.

- You can benefit from the government's initiatives and incentives for the Bumiputera community, such as affordable housing schemes and grants.

- You can contribute to the social and economic development of the Bumiputera community and promote racial harmony in Malaysia.

However, buying a bumi lot/quota also comes with some challenges and limitations, such as:

- You can only sell or transfer the bumi lot to another Bumiputera buyer, unless you get a consent from the state authority to release the bumi status.

- You might face difficulties in finding a suitable bumi lot, as they are limited in supply and high in demand.

- You might have to deal with some legal and administrative issues, such as verifying the bumi status of the seller and the property, obtaining the necessary documents and approvals, and paying the fees and taxes.

Therefore, before buying a bumi lot, you should do your research, compare your options, and consult a professional real estate agent and lawyer to help you with the process. Buying a bumi lot can be a rewarding investment if you know what you're getting into and how to make the most of it.

Hope you find the information is fruitful and happy hunting!

Signing off for now, 

Ashlin REN01427