What is the Loan Agreement Legal Fees on buying a property?
- Legal Fee: RM500,000 x 1.25% = RM6,250
- Loan Stamp Duty: RM500,000 x 0.5% = RM2,500
- SST: 8% of Legal Fee (RM6,250) = RM500
Estimated Total: RM 9,250 + Disbursements.
How much is the Tenancy Agreement Preparartion fee?
Legal fee for preparation of Tenancy Agreement up till 3 years is 30% of the monthly rental (subject to a minimum of RM 500). Subjected to 8% SST.
Example:
To prepare a Tenancy Agreement for a monthly rental of RM 5,000 per month:
Legal fees = RM5,000 x 0.3 = RM 1,500.00
8% SST = RM 1,5000 x 0.08 = RM 120.00
Miscellaneous fees = RM 50.00
8% SST = RM 4.00
Total Legal Fees = RM 1,674
How much is the Agency Fee payable when renting a property?
The standard agency fee for renting a property is typically 1.25 month’s rent and is subjected to 8% SST. This fee is generally paid by the landlord, not the tenant.
- Duration-Based Rates: Fees are regulated based on the length of the tenancy:
- Up to 3 years: 1.25 months of gross rental.
- 3–4 years: 1.50 months of gross rental.
- 4–5 years: 1.75 months of gross rental.
- Exceeding 5 years: 1.75 months of gross rental.
How much is the Real Property Gains Tax (RPGT) when selling a property?
| Disposal Period | Malaysian Citizens/PR | Foreigners |
|---|---|---|
| Within 3 years | 30% | 30% |
| 4th Year | 20% | 30% |
| 5th Year | 15% | 30% |
| 6th Year & Beyond | 0% | 10% |
- Exemptions: Malaysians/PRs are entitled to a once-in-a-lifetime exemption on the chargeable gain for the disposal of a private residential property.
- Calculation: The tax is imposed on the net chargeable gain (Selling Price – Purchase Price – Allowable Costs).
- Deadlines: The disposal form must be submitted within 60 days of the sale.
- Companies: Companies pay 30% (years 1-3), 20% (year 4), 15% (year 5), and 10% (year 6+).
How much is the Agency Fee payable when selling a property?
The seller pays a maximum of 3% of the purchase price as Agency Fee. Agency fee is subject to 8% SST. Agency fee is payable upon sigining of SPA and payment of 10% deposit.
The agency fee is borne by the seller.
How much is the Stamp Duty payable when purchasing a property?
Non-Malaysians pay a flat 8% stamp duty on residential property transfers, while Malaysians pay a tiered 1% to 4% rate. First-time Malaysian buyers can get exemptions for homes up to RM500,000 until the end of 2027. Loan agreements for all buyers incur a 0.5% stamp duty.
Stamp Duty for Non-Malaysians/Foreigners (Residential)
- Rate: 8% flat rate on the instrument of transfer (Memo of Transfer – MOT).
- Applicability: Applies to all non-citizen individuals (except Permanent Residents) and foreign-owned companies from 1 January 2026.
- Minimum Thresholds: Foreigners must adhere to minimum purchase prices (e.g., RM1 million in many areas).
Stamp Duty for Malaysians (Progressive Rate)
Malaysian citizens and permanent residents pay on a progressive scale:
- First RM100,000: 1%
- RM100,001 – RM500,000: 2%
- RM500,001 – RM1,000,000: 3%
- Above RM1,000,000: 4%
Are there any rules for Non-Malaysians buying a property in Malaysia?
Non-Malaysians can buy property, but must adhere to state-specific minimum price thresholds (usually RM1 million+), obtain state authority approval, and avoid restricted property types like Malay Reserved Land, low-cost units, or Bumiputera-allocated lots. Key rules include minimum price thresholds (e.g., RM2M in Selangor, RM1M in KL) and potential state levies.
- Price Thresholds: Most states require a minimum purchase price of RM1 million for residential properties, though this varies by state.
- Location Specifics:
- Selangor: Minimum of RM2 million for landed properties; foreigners are generally restricted to strata-titled properties.
- Kuala Lumpur: Minimum of RM1 million.
- Malay Reserved Land: Property built on land designated for indigenous Malays.
- Low/Medium-Cost Units: Defined by state authorities.
- Bumiputera Lots: Properties allocated to Bumiputera interest in development projects.
- State Authority Approval: Consent from the state authority is required for foreign ownership.
- Foreigner Levy: Some states (e.g., Johor, Penang, Melaka) charge a levy on top of stamp duty, which can range from 2% to 3% of the property price.
- Real Property Gains Tax (RPGT): Foreigners are taxed at 25% on capital gains for properties sold within the first 5 years.
- Residential condominiums and landed houses
- Commercial properties
- Industrial land
How much is the Stamp Duty payable when renting a property?
The exemption from stamp duty for annual rentals not exceeding RM2,400 has been removed for tenancy agreements effective from January 1, 2025. Therefore, this RM2,400 exemption is no longer a factor in stamp duty calculations for new agreements from that date onwards.
Stamp Duty Computation for 1 year tenancy: (monthly rent x 12) / 250
For example if the monthly rental is RM8,000: (8000 x 12) / 250 = RM384.00
Stamp Duty Computation for 2 years tenancy: stamp duty fee for the corresponding lease term x (monthly rent x 12) / 250
For example if the monthly rental is RM 8,000: 3 x (8000 x 12)/250 = RM 1,152.00
RM10 for each additional copy
The tenancy agreements are legally required to be prepared by a practicing lawyer, as drafting them is considered legal work. Legal fees are borne by the tenant while, the Landlord bears the Agency fees.
How much is the Legal Fees Payable when Buying a Property?
The legal fees payable to a lawyer acting for you when you buy a property is calculated based on the purchase price as follows:
- For the first RM150,000, the legal fees payable is 1%
- For the next RM850,000, the legal fees payable is 0.7%
- For the next RM2,000,000, the legal fees payable is 0.6%
- For the next RM2,000,000, the legal fees payable is 0.5%
- For the next RM2,500,000, the legal fees payable is 0.4%
- For the remaining, if any, negotiable
Example:
For instance, if the purchase price is RM1,000,000. The calculation is as follows:
Total legal fees payable: (RM150,000 X 1%) + (RM850,000 X 0.7%) = RM 7,450.00
What is the difference between a real estate agent and a real estate broker?
Most states require real estate sales professionals to be licensed by the state, so that they can control education and experience requirements and have a central authority to resolve consumer problems. The terminology used to identify real estate professionals varies a little from state to state. Brokers are generally required to have more education and experience than real estate salespersons or agents. The person you normally deal with is a real estate agent or salesperson. The salesperson is licensed by the state, but must work for a broker. All listings are placed in the broker’s name, not the salesperson’s. A broker can deal directly with home buyers and sellers, or can have a staff of salespersons or agents working for him or her.
Why should I use a real estate salesperson?
A real estate salesperson is more than just a “sales person.” They act on your behalf as your agent, providing you with advice and guidance and doing a job – helping you buy or sell a home. While it is true they get paid for what they do, so do other professions that provide advice, guidance, and have a service to sell –such as Certified Public Accountants and Attorneys
The Internet has opened up a world of information that wasn’t previously available to homebuyers and seller. The data on listings available for sale is almost current – but not quite. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent.
If you’re selling a home, you gain access to the most buyers by being listed in the Multiple Listing Service. Only a licensed real estate agent who is a member of your local MLS can get you listed there – which then gets you automatically listed on some of the major real estate web sites. If you’re buying or selling a home, the MLS is your agent’s best tool.
However, the role of an agent has changed in the last couple of years. In the past, agents were the only way home buyers and sellers could access information. Now agents are evolving. Because today’s home buyers and sellers are so much better informed than in the past, expertise and ability are becoming more important.
The real estate agent is becoming more of a “guide” than a “salesperson” — your personal representative in buying or selling a home.
I have a family friend who is a Realtor. I like her and she is a help but she gives me one price to sell my home for and I think it is too low. So I called another agent who suggested a price more in line with my expectations. Who do I choose?
You might want to consult a couple more Realtors on the market value of your home. Most of the estimates should be in the same ballpark.
It could be that your friend is being more honest with you about the value of your home and the other Realtor gave you a higher number because he already knew you expected it. This is called “Buying a Listing” and is the subject of an article on our web site.
Or it could simply be that your friend is a good friend, but not that great of a real estate agent.
Mixing business and friendships is always risky to the friendship. On the other hand, if your friend is truly competent and was providing wise advice, she may be offended if you ignore the advice and choose another agent.
I have to make a choice between an updated home in an older neighborhood or a newer home in a more modern neighborhood. The home in the older neighborhood has almost everything I want and is much larger, but which makes the most sense as an investment?
If your goal is to buy a home for it’s resale value and the one you are thinking of buying in the older neighborhood is at the upper end of values for that neighborhood, then it may not be the wisest choice. If it is similar or lower in price to the others, then there should be no problem, because pricing should be considered in relation to the local neighborhood and not compared to homes in other neighborhoods (for the most part)
Plus, is it a neighborhood on the decline, or are others going to be fixing things up, too, so that it is a neighborhood that is improving? It could turn out to be a very good deal as long as you don’t “overpay” because of the recent improvements.
Remember that you also buy a home for it’s value to you as a “home,” and that is something else you should consider. Which neighborhood would you AND your family feel most comfortable in?
When buying a new home, what upgrades should we go for? What holds the most value? Do we upgrade the lot? Pick more square footage in the house? Add an extra bedroom?, etc.
A lot depends on why you are buying the house. Are you buying it mostly as a home or mostly as an investment? There is a difference.
For the most part, upgrades are high-profit items for builders. They aren’t designed to enhance the value of the house, but make you happier with the house you do buy.
If you are looking at your home as an investment, then you buy from the smaller to medium size in the tract and spend only a minimal amount on upgrades. If you are looking at your purchase as a home, then you select upgrades that will enhance your quality of living.
One rule of thumb is to always upgrade the carpet and padding.