How high are realtors´ and lawyers´ fees in Malaysia? What about other property purchase costs?
How difficult is the property purchase process in Malaysia?
Foreigners can purchase any kind of property with a minimum value of MYR 1 million (US$250,250) as of 2014. 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.
What are the costs like when buying a property in Malaysia?
|Stamp Duty||1% - 4%||buyer|
|Lawyer/Solicitor´s Fees||0.4% - 1%||buyer|
|Other Fees||MYR180 (US$49)||buyer|
|Real Estate Agent´s Fees||2% - 2.75%||seller|
|Costs paid by buyer||1.50% - 5.10%|
|Costs paid by seller||2.00% - 2.75%|
|ROUNDTRIP TRANSACTION COSTS||3.40% - 7.85%|
| See Footnotes
Source: Global Property Guide
Footnotes to Transaction Costs Table
The round trip transaction costs include all costs of buying and then re-selling a property - lawyers´ fees, notaries´ fees, registration fees, taxes, agents´ fees, etc.
|PROPERRTY VALUE, MYR (US$)||RATE|
|Up to 100,000 (US$25,000)||1%|
|100,000 – 500,000 (US$125,000)||2%|
|500,000 – 1,000,000 (US$250,000)||3%|
|Over 1,000,000 (US$250,000)||4%|
|VALUE OF PROPERTY, MYR||RATE|
|Up to 150,000 (US$40,541)||1%|
|150,000 - 1 million (US$270,270)||0.70%|
|1 million - 3 million (US$810,811)||0.60%|
|3 million - 5 million (US$1,351,351)||0.50%|
|5 million - 7,500,000 (US$2,027,027)||0.40%|
|Over 7,500,000 (US$2,027,027)||negotiable on property value exceeding threshold but shall not exceed 0.40%|
Other fees are around MYR180 (US$49). Other fees include stamping fee (MYR10 or US$3 per document), adjudication fee (MYR10 or US$3), search fee (MYR60 or US$16), and registration fee (MYR100 or US$27).
|Stamping fee (per document)||10|
Other fees are around MYR180 (US$58). Other fees include stamping fee (MYR10 or US$3per document), adjudication fee (MYR10 or US$3), search fee (MYR60 or US$18), and registration fee (MYR100 or US$31).
Real Estate Agent´s Fee:
Real estate 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 (US$313) per case. The scale is not applicable to sale of foreign properties in Malaysia.
|VALUE OF PROPERTY, MYR||RATE|
|Up to 500,000 (US$135,135)||2.75%|
|Over 500,000 (US$135,135)||2%|