Additional Costs for Property Purchase

For all property buyers or future ones. ;)

How to calculate Legal fees and Stamp duty when buying property in Malaysia?

1) Stamp Duty == 1% – 3% (By Buyer)
2) Lawyer/Legal Fees == 0.4% – 1% (By Buyer)
3) Other Fees == RM180 (By Buyer)
4) Real Estate Agent’s Fees == 2% – 2.75% (By Seller)

Explanation as follow:

1) Stamp Duty (Value Of Property in RM — Rate)
First 100,000 — 1%
Next 400,000 — 2%
Next 1.5 million — 3%
Above 2.0 million – 4%

2) Lawyer/Solicitor’s Fee (Value Of Property in RM — Rate)
First 150,000 — 1% (subject to a minimum fee of RM300)
Next 850,000 — 0.7%
Next 2,000,000 — 0.6%
Next 2,000,000 — 0.5%
Next 2,500,000 — 0.4%

* where the consideration or adjudicated value is in excess of RM7,500,000 then it’s negotiable but shall not exceed 0.4% of such excess

3) Other Fees (RM)
Stamping Fee (per document) — RM10
Adjudication Fee — RM10
Title Search Fee — RM60
Registration Fee — RM100

4) Real Estate Agent’s Fee
Agent’s Fees are regulated by the Board of Valuers, Appraisers and Estate Agents Malaysia (LLPEH). Commission is paid either by buyer or seller, subject to a maximum discount of 30% but a minimum fee of RM1,000 per case. The scale is not applicable to sale of foreign properties in Malaysia.

Agent’s Fee (Value Of Property in RM — Rate)
First 500,000 — 2.75%
Remainder — 2%
Property Buying Procedure(Simplified):

The first step to purchasing property in Malaysia is to hire a real estate lawyer to assist in the transaction. Once property is selected, a Letter of Offer/Acceptance(also known as booking receipt) is signed, and a 3% deposit is expected from the buyer.

Within 14 days, the Sale and Purchase Agreement is signed. The buyer must pay another 7% deposit. From the date of the signing, the buyer has a maximum of three months to accomplish full payment. Sometimes, the buyer will be allowed one more month to pay the remaining amount, thus it will be 3+1. Penalty of around 7-8% interest per annum of the property value will be imposed for late payment.

The Sale and Purchase Agreement must be stamped at the Stamp Office. After the examination on the property of the valuation department, Stamp Duty is paid to the Stamp Office. The transfer must be registered at the Land Office Registry.

Be cautious when buying new property in unfinished condominium projects. Buyers may not be fully protected against default, an issue vigorously raised by the Malaysian House Buyers’ Association, which has pointed to flaws in The Housing Development (Control & Licensing) Act 2002, and the Strata Titles Act. Those buying unfinished property from developers should ensure that the developer has a valid Developer’s License and a valid Sales & Advertising permit.

Disclaimer : This article is written to give you a basic idea of how property buying cost and procedure in Malaysia works in a nutshell. Furthermore, I WILL not be liable for any inaccuracies or loss suffered based on the information given. Change of policies or new regulations or new pricing may be imposed in the future. I shall try to keep updated as possible while you can consult your real estate agent, banker and lawyer for more information. You can contact me too at my email or my mobile number if you require any further clarification.

(The article was initially written by a real estate agent and some additional information has been included from a banker's point of knowledge)