Procedure:
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.
Fees
1. Sale & Purchase Agreement (SPA)(a) Lawyer Fees for SPA (Calculated based on SPA price):
First RM 150,000: 1% (Or minimum RM300, whichever is higher)
Subsequent up to RM 1 million: 0.7%
Subsequent up to RM 3 million: 0.6%
Subsequent up to RM 5 million: 0.5%
Subsequent up to RM 7.5 million: 0.4%
Above RM 7.5 million: Negotiable
(b) SPA legal Disbursement Fee: A few hundred Ringgit
(c) Government Tax on Agreement: 6% of total lawyer fees
(d) Stamping for SPA:
First RM 100,000: 1%
Subsequent up to RM 500,000: 2%
Subsequently onwards: 3%
2. Loan Facility Agreement
(a) Legal Fees for Loan Facility Agreement:
First RM 150,000: 1% (Or minimum RM300, whichever is higher)
Subsequent up to RM 1 million: 0.7%
Subsequent up to RM 3 million: 0.6%
Subsequent up to RM 5 million: 0.5%
Subsequent up to RM 7.5 million: 0.4%
Above RM 7.5 million: Negotiable
(b) Loan Facility Agreement legal disbursement fee: A few hundred Ringgit
(c) Government Tax on Agreement: 6% of total lawyer fee
(d) Mortgage Reducing Term Insurance (ie. think of it as a life insurance for your home
loan): RM 1,000 or more (some banks waive this amount)
(e) Bank processing fee for loan: RM 200
3. Others:
(a) Land/Strata Ownership Title Transfer : A few hundred ringgit + 6% Government Tax
Legal Fee
(b) Stamp Duty for transfer of Ownership Title
(Also known as memorandum of transfer or MOT)
First RM 100,000: 1%
Next RM 400,000: 2%
Subsequent amount: 3%
(c) Consent to Charge (for Leasehold Property): at least few hundred +
6% Government Tax legal Fee
