Tax-free car

Choosing, buying and selling a tax-free car on MM2H visa in Malaysia. May 2013 update.

One of the biggest advantages of getting a retirement visa in Malaysia is being able to buy a car tax-free.  In our case we saved about MYR 40,000 (GBP 8,000). You can only buy one car tax-free.

If you want to part exchange for a new car in the future, though, or simply want to sell the car, it is not as easy as you might expect.

BUYING

We took the easy way, and used the services of our visa agent, who will do everything for you: explain the system, take you to car showrooms, and once you have selected a car, do all the paperwork for you.  Then you wait for up to several months for the car to be manufactured/assembled, and then be delivered to you.  The agent’s fee is only a small amount compared to the tax savings.

SELLING

The visa agent will probably also take care of arrangements to part exchange or sell your tax-free car.  However, the car dealer you are purchasing your next car from may also help you, in which case you can avoid the agent fee.  You may find it helpful to go with someone who speaks Malay, otherwise. It seems that even if your car is several years old, you cannot sell without this bureaucratic procedure and paying some of the tax that had been previously waived.  The following is the procedure if you live in Penang.

  1. Go to the Butterworth Customs office behind Sunway Carnival.  There you need to write a letter asking permission to sell the car, and you will be told the specific format you need for the letter.  Once you have completed the letter they send it to Putra Jaya. (PJ)
  2. The Butterworth Customs office telephones you and you return to the office to pick up the reply from the PJ office.  This letter tells you how much tax you must repay.
  3. You take the letter to an office above the post office in Beach Street (7F?) and pay them the tax by bank draft, and receive a chop and a receipt.
  4. You need to download a form from the road tax department, and then go to JPJ (Road Transport Department) at Bukit Jambul with this form, receipt, the passport you had at the time you bought the car, and the car registration form – and copies of all these, and a copy of your visa.  JPJ takes the registration form and gives you a receipt.  You are now done.  You can hand the car over to the dealer, or purchaser.

Tropical Expat

MAY 2013 UPDATE
CHOOSING

In all the countries I am familiar with, the major cost of car ownership is depreciation in the value of the car. Buying a good secondhand car, and thus bearing a lot less of the depreciation costs, was probably the cheapest path to car ownership.  A more expensive, but perhaps more attractive approach, was to buy a new car, but keep it for many years – you bear the depreciation, but over a good many years, so that per annum it works out quite low. A friend kept her Honda Accord for 27 years!! It was a bit shoddy, but still performed well, when she gave it away to a friend of hers.

Well, in Malaysia, almost everything, including cars, is perceived as keeping its value, and sold for little less than the new price. Thus it is generally better just to buy the item new.  But for cars this may be changing:

From The Star:

“…the import duty on cars from Japan and Australia would be gradually reduced from the current 30% to 0% by 2016.

He said the import duties would be reduced to 15% in 2013, 10% in 2014 and 5% in 2015.

There are three types of duties on cars: the import duty, the excise duty, which is between 60% and 105%, and the sales tax, which is 10%.”

It was possible to buy a car under an MM2H visa, use it for five years, and then part exchange it for a smaller new car for a very small extra payment, because some cars hold their value very well, particularly Japanese cars.  For example, buy a Honda Civic, use it for five years, and part exchange for a Honda Jazz. Or an Honda CRV, and then a City.

With the changes in the government’s various taxes on cars, it looks like a less viable plan of action, as second hand cars are unlikely to hold their value so well.  To date, Japanese cars have maintained their value best.  But the manufacturers are slower to build in new technology than the Korean and European manufacturers.

And the “luxury” European makes depreciate very fast here, so if you want one, buying second hand might be sensible. Of course, this would mean not taking advantage of the MM2H concession, so instead, if you owned one in your home country, it could be better to import it.

So, if you want a luxury European car, importing one you owned, or buying here second hand is probably best. For other cars that are assembled here, buying new under MM2H, and then keeping long term is probably the cheapest.

Langkawi – December 2012. Holidaying here. Retiring here?

One Malay word you should know if you are in Langkawi – “Pantai” = “Beach”.

20121221 (27)s

Tanjong Rhu beach – in the north of Langkawi

I wrote a blog about Langkawi after my visit in April 2012, and I have just returned from my third holiday in Langkawi in about four years. I will combine my previous blog with this, adding more information. The smaller photos are from April 2012, the larger from December 2012 – so you can tell

GETTING THERE

  • In August 2008 we drove up to Kuala Perlis and caught the ferry over to the main ferry terminal in Langkawi.  All we had to do was phone a contact who ran a parking lot, give an approximate arrival time, and he bought the ferry tickets.  When we arrived we could park undercover and he gave us the tickets, and pointed out where to catch the ferry.
  • In April we flew on Air Asia from Penang to Langkawi, which is about 25 minutes in the air, but from when we left home by taxi to when we were in our hotel room about four hours had elapsed.  Which was about the same amount of time as driving and catching the ferry, although the flight was less strenuous.

http://tropicalexpat.com/retire-in-langkawi/

Langkawi – some observations from my latest visit. And could I retire here?

Tanjong Rhu Beach

I have just returned from my second holiday in Langkawi in about three and a half years. So, while I cannot claim any vast knowledge, I would like to make a few observations.

For a newer version click the green button.

http://tropicalexpat.com/index.php/2018/09/19/cleaning-my-air-con/

GETTING THERE

  • In August 2008 we drove up to Kuala Perlis and caught the ferry over to the main ferry terminal in Langkawi.  All we had to do was phone a contact who ran a parking lot, give an approximate arrival time, and he bought the ferry tickets.  When we arrived we could park undercover and he gave us the tickets, and pointed out where to catch the ferry.
  • This time we flew on Air Asia from Penang to Langkawi, which is about 25 minutes in the air, but from when we left home by taxi to when we were in our hotel room about four hours had elapsed.  Which was about the same amount of time as driving and catching the ferry, although the flight was less strenuous.
  • There are other alternatives, such as a ferry from Penang to Langkawi, directly; or driving to Alor Setar, and catching a ferry from there.

WHEN

  • High season is supposed to be between mid-November and mid-April, which corresponds to the dry season -but we got low season prices in early April, and rain didn’t bother us. As I mentioned, we’d previously visited in August, and again we had no problems with the weather.

ACCOMMODATION

  • Langkawi has changed quite a bit in the intervening three years. Now there is a vast range of accommodation available – from very cheap to very expensive (resorts), and many choices in between.  Cenang Beach is the mass tourism area.  There are a lot of motels now, homestays all over the island, and you can even stay in a caravan at a beach. Or you can camp at the government fruit farm, mentioned below.

You can rent this caravan at the beach

GETTING AROUND

  • Car rental is cheap – from RM40 or so a day for an old car in poor condition, RM70 for a newish car in good condition, and motorcycle hire is also available.  It seems you can also rent bicycles.  If you rent a car, check the tyre condition before you drive off, too.  They will also give you a road map, most likely.  Of course, there are taxis; and buses exist, but I saw very few, so you’d need a lot of time.

This one year old Proton Saga cost RM70 a day to rent, and RM50 deposit.

DRIVING

  • The standard of driving in Langkawi is better than in Penang, and there are not so many cars on the road, so driving can be quite relaxing.  As Langkawi is quite small, it doesn’t take very long to get where you are going.  I think it took about 40 minutes to drive from the crocodile farm in the north-west, to Kuah, the main town,  in the south.
  • Petrol is slightly cheaper than the mainland, at 1.90 a litre.  In three nights / four days we used about RM40 of petrol for about 250KM – but put in RM50 as we didn’t want to be low on petrol on the other side of the island where there is no petrol station so near. (Yes, this happened to us last time.)
  • You are warned not to drive at night because of cows and water buffaloes on the road.  Cows are a tan colour, and not so hard to see, but water buffalo are black, and hard to spot.

cows wander the roads at night

ATTRACTIONS

  • As a tourist there are some nice things to do, and the airport tourist office has brochures and maps, of course.  I’ll just mention a few activities.
  • Our favourite beach is Tanjong Rhu in the north of the island – but there are some other nice beaches, too.  And there are no jellyfish – at least at this time of year – so you can swim in sea.  As you approach Tanjong Rhu there is an open manned barrier for some reason – just slow down and drive through.
  • You can  also swim in waterfall pools in the jungle.

waterfall pool – the wet season hasn’t yet started, so water level fairly low

  • When we were there we could walk off into the jungle and not get attacked by mosquitoes – much.  We did get the odd bite, but nothing like the jungle, or even anywhere outside,  in Penang.
  • The government agricultural research facility – Taman Agro-Teknologi is interesting. They take you on a bus within the grounds to eat the fruit in season, and then drive you around, stopping to show you different fruit trees and landscapes.

Dragon fruit plants at the Taman Agro-Teknologi

  • And the Bird Paradise and Wildlife Park is worth a visit if you like birds.  Many attractions charge tourists a higher price than Malaysians. I dislike this, so I asked if I could get the lower price as I was a resident; and I showed my Malaysian visa.  I was charged the lower price, which was RM15 instead of RM22.  The tickets we were given had printed on them that they were children’s tickets. This question is worth trying everywhere there is discriminatory pricing.

one of my favourites

and this is a friendly one

  • There is far less litter than much of Malaysia. It was so nice to see beaches and jungle paths with the only litter being leaf litter.  This is so different from elsewhere in Malaysia.

FOOD AND DRINK

  • Food more expensive than Penang and it is much more expensive to eat out, and there is less variety.
  • Since we live in Penang we didn’t really see the point in spending a lot on food, so we had a big breakfast at the hotel, which was included, and ate fairly lightly later in the day.
  • The biggest variety of restaurants is in Cenang Beach. Kuah, the main town, of course has restaurants, too, as do the various malls. And there are the usual hawker centres and roadside stalls.
  • We enjoyed fish and chips on the north coast, however.

English style fish and chips

  • Of course, Langkawi is tax-free for at least alcohol and tobacco products.  There are many duty-free stores, but probably the cheapest are in Kuah.  It also means restaurants often charge a lot less for alcohol, too. A can of Royal Stout cost me RM1.80 in a store.  Sparkling wine costs RM30 and up, and champagne RM150 and up. For more, read this on Langkawi’s tax status.

this cost RM47 – the view somewhat more per night

COULD I RETIRE HERE?

  • I think it is too quiet for me to retire here, and too isolated – you can’t just drive onto the mainland and go somewhere.  And I would miss the variety and low price of food in Penang. Certainly the tax status of Langkawi is attractive, though.
  • A local Japanese lady we spoke to said that the two downsides of living in Langkawi are you really need to speak Bahasa, and for some hospital treatment you have to go to the mainland – Penang etc.
  • However, if you wanted a very quiet life, perhaps it would suit you, if you had no medical concerns. Bahasa doesn’t strike me as too difficult to learn.

Buying and selling a tax-free car on MM2H visa in Malaysia

One of the biggest advantages of getting a retirement visa in Malaysia is being able to buy a car tax-free.  In our case we saved about MYR 40,000 (GBP 8,000). You can only buy one car tax-free.

If you want to part exchange for a new car in the future, though, or simply want to sell the car, it is not as easy as you might expect.

BUYING

We took the easy way, and used the services of our visa agent, who will do everything for you: explain the system, take you to car showrooms, and once you have selected a car, do all the paperwork for you.  Then you wait for up to several months for the car to be manufactured/assembled, and then be delivered to you.  The agent’s fee is only a small amount compared to the tax savings.

SELLING

The visa agent will probably also take care of arrangements to part exchange or sell your tax-free car.  However, the car dealer you are purchasing your next car from may also help you, in which case you can avoid the agent fee.  You may find it helpful to go with someone who speaks Malay, otherwise. It seems that even if your car is several years old, you cannot sell without this bureaucratic procedure and paying some of the tax that had been previously waived.  The following is the procedure if you live in Penang.

  1. Go to the Butterworth Customs office behind Sunway Carnival.  There you need to write a letter asking permission to sell the car, and you will be told the specific format you need for the letter.  Once you have completed the letter they send it to Putra Jaya. (PJ)
  2. The Butterworth Customs office telephones you and you return to the office to pick up the reply from the PJ office.  This letter tells you how much tax you must repay.
  3. You take the letter to an office above the post office in Beach Street (7F?) and pay them the tax by bank draft, and receive a chop and a receipt.
  4. You need to download a form from the road tax department, and then go to JPJ (Road Transport Department) at Bukit Jambul with this form, receipt, the passport you had at the time you bought the car, and the car registration form – and copies of all these, and a copy of your visa.  JPJ takes the registration form and gives you a receipt.  You are now done.  You can hand the car over to the dealer, or purchaser.

 

Tropical Expat

Hello from Penang

Most recent on top…

Miami Beach, Penang

15.3.12

There are many things I wanted to know about Penang and Malaysia, and couldn’t find on the web.  This blog, will, I hope gradually cover these matters.

The blog also helps clear out my brain of things I think, so I can move on and think of other things.

2.3.12

I try to write a new blog every three days – e.g 3rd, 6th, 9th etc. of the month

I update previous blogs with new information, but often don’t really bother marking what the updates are.  Sometimes I might use italics to distinguish new material.

4.2.12

Now two thirds through “Blogging for Dummies”.

In the future I hope to cover:

  • Why retire to Malaysia
  • Buying a house, a condo or renting
  • Selling your tax-free car
  • Gardening in the tropics – aka – growing stuff on concrete under an unrelenting sun
  • A typical day for this tropical retiree
  • Local restaurants
  • The German invasion of Penang – the sudden proliferation of German restaurants in Penang this past few months
  • Living with (or hopefully without) mosquitoes
  • 20 pence per hour is too much for parking!!
  • To Singapore by train
  • To Bangkok by train
  • Attractions in Penang
  • Day trips from Penang
  • Walking in Penang for the non-suicidal
  • Couch surfing
  • Sunshine is good for you – sunscreens are not
  • Making your own… simple recipes for stuff that’s good for you
  • Tropical fruit smoothies – so nice you don’t even put vodka in them
  • Interviews with expats and others of interest
  • Expats who don’t speak English (or Bahasa, Hokkien, or Tamil)
  • Can you live without the Internet?

and some more esoteric topics

  • I threw away my walking stick and started running after I learnt Reiki
  • MMS and me
  • My guardian angel helps me park
  • Sungazing?  How’s that working out for you?
  • Past life regression – gee, you mean I wasn’t a pharaoh in a past life?

27.1.12

Hi.  I’m new to this blogging thing.  And I am only half way through “Blogging for Dummies”, so I’m planning to edit this page once I know what I am supposed to be doing.

Tropical Expat