Malaysia: Guide to Buying Costs and Procedures
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Buying costs are very low in Malaysia
How high are realtors’ and lawyers’ fees in Malaysia? What about other property purchase costs?
Transaction Costs |
||
| Who Pays? | ||
| Stamp Duty | 1% - 3% | buyer |
| Lawyer/Solicitor's Fees | 0.4% - 1% | buyer |
| Other Fees | MYR180 (US$49) | buyer |
| Real Estate Agent's Fees | 2% - 2.75% | seller |
| Costs paid by buyer | 3.81% - 11.6% | |
| Costs paid by seller | 1.05% - 2.05% | |
| ROUNDTRIP TRANSACTION COSTS | 4.86% - 13.65% | |
| See Footnotes Source: Global Property Guide |
||
How difficult is the property purchase process in Malaysia?
Foreigners can purchase any kind of property with a minimum value of MYR250,000 (US$67,977). They are allowed to purchase up to two residential properties – two condominiums (max. 50% foreign ownership within a block) OR one condominium and one of the following:
- Terrace or linked houses above two storeys, but limited to 10% of the total number of units built of this type
- Lands/bungalows and semi-detached houses, but limited to 10% of units built of these types
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 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.
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.
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.
Currency:
Malaysia uses Malaysian Ringgit. Exchange rate is at US$1=MYR3.6777 as of 26th October 2006.
STAMP DUTY |
|
| VALUE OF PROPERTY, MYR | RATE |
| First 100,000 | 1% |
| Next 400,000 | 2% |
| Remainder (Over 500,000) | 3% |
Lawyer/Solicitor's Fee:
Lawyer/Solicitor's Fee
LAWYER'S FEE |
|
| VALUE OF PROPERTY, MYR | RATE |
| First 150,000 | 1% |
| Next 850,000 | 0.7% |
| Next 2,000,000 | 0.6% |
| Next 2,000,000 | 0.5% |
| Next 2,000,000 | 0.4% |
| where the consideration or adjudicated value is in excess of MYR7,500,000 | negotiable on the excess (but shall not exceed 0.4% of such excess) |
Other Fees:
OTHER FEES |
|
| FEES | MYR |
| Stamping fee (per document) | 10 |
| Adjudication fee | 10 |
| Search fee | 60 |
| Registration fee | 100 |
| Total | 180 |
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 MYR1,000 per case. The scale is not applicable to sale of foreign properties in Malaysia.
AGENT'S FEE |
|
| VALUE OF PROPERTY, MYR | RATE |
| First 500,000 | 2.75% |
| Remainder | 2% |
Malaysia - more data and information
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Your Comments
posted by smith bello | 2007-01-18
banker, lagos nigeria
i want to buy a 4bedroom bungalow in malaysia please i need a competent agent and a lawyer my personal mobile num is 234-80-37469088
posted by Matthew Pollock | 2007-01-31
Editor
Lawyers you will find, perhaps surprisingly, top left under "About Malaysia - LAWYERS". Agents in the same place under REALTORS.
posted by Aisha Ong | 2007-04-02
Quantity Surveyor, Singapore
Hi, I've recently booked for a semi-detached house at taman perling, johor and have scheduled to sign the S&P. I was given 2 copies of the following bills to pay before signing the S&P. Please advise if the charges was reasonable and according to practise: A) Bill state authority approval agreement: 1. Stamp duty: RM 40 2. Registration - Consent: RM500 3. Registration - SPA: RM60 4. Registration- Levy: RM10,000 5. Swearing : RM20 6. Printing: RM50 7. Transport: RM50 8. Courier Charges: RM50 9. Misc Expenses: RM 50 10. Service rendered including taking instruction to prepare and complete the state authority approval agreement: RM700 + RM 35 for service tax TOTAL: RM11,555.00 B) BILL SALE AND TRANSFER 1. Search land office : RM80 2. Stamp duty - SPA: RM50 3. Stamp Duty - Deed of convenants: RM40 4. Stamp Duty - Adjudication: RM10 5. Stamp Duty - Transfer: RM7,180 6. Registration - Transfer: RM2,000 7.Registration - Borang 1 : RM50 8. Misc expenses: RM50 9. Printing: RM50 TOTAL RM9,510 FYI, the property purchase price is RM408,800.00 Please advise. Puzzled Buyer
posted by Prince Cruz | 2007-04-10
Senior Economist, Global Property Guide
Hi Puzzled Buyer, I assume that you are buying from a developer. Our transaction cost table provides a general guide for purchase of second hand property from an individual. Some developers charge other expenses as stated in your comment. Despite the number of individual cost items, the overall cost for your purchase is around 5%, w/c is quite reasonable. If you have doubts you can contact lawyers and/or realtors, a list is provided in our site. Happy house hunting!
posted by mrs lim | 2007-07-12
singapore
Do we need to apply for consent from Land office for purchase of condo unit price rm248k? if yes, what are the add fees (stamps, legal etc)thx
posted by Lily Ng | 2007-08-21
Singapore
I just make a deposit for a Condo cost RM552K. I like to know the stamp duty 1-3%, does it include the levy RM10K for foreigner buying property in Malaysia. Pls advise. Thanks.
posted by venessa | 2008-02-19
sale, Malaysia Sunway
I just make a deposit for a Condo cost RM552K. I like to know the stamp duty 1-3%, does it include the levy RM10K for foreigner buying property in Malaysia. Pls advise. Thanks.Stamp Duty charges:1st 150k---->1% 2nd 400k---->2% 3nd above 400K-->3%so Lily, your legal fees is about RM9540..plus all those admin
posted by Sarunas Papinigis | 2008-03-22
International RE broker, Lithuania
Dear Globalpropertyguide,As i have heard, the capital gain tax in Malaysia is abolished from April 2007 and is 0% for the moment. Still, it is mentioned around 5% in your website. Pls advice. Thank you.
posted by theShah | 2008-03-27
Internet Marketeer, Singapore
I want to purchase a semi-d property at Taman Perling which belongs to my wife's parents..How do I go about it doing the transaction?Can I get financing in JB? or should I get one in Singapore?What is the indicative valauation of semi-d properties in Taman Perling?
posted by Laurie | 2008-04-15
Programmer, Australia
Do I have to pay the full amount? As I am not a resident of Malaysia, I can still get a mortgage from the local banks?