There are additional costs when it comes to buying a property, not just the down payment! You’d also need to pay for the legal fees for the Sale and Purchase Agreement (SPA) and loan agreement; the real estate agent’s commission; as well as the stamp duty fees.
Wanting to buy your first property is always an exciting, and slightly nerve-racking, experience! Here are some reasons why:
- You’ve done your research to find the perfect area surrounded by plenty of amenities (and the neighbours aren’t weird in any way).
- You’ve prepared a solid budget that maps out your repayments, savings, and miscellaneous expenses.
- You’ve also selected the right bank that will provide you with a 90% margin of finance with an attractive interest rate.
“Now, what could possibly go wrong,” you think.
Before you can even take the last step to seal that sweet deal, you discover some additional ‘hidden fees’ you overlooked. Yep, apart from the property’s down payment, there’s also the following:
- Legal fees for the Sale and Purchase Agreement (SPA) and loan agreement
- Real estate agent’s commission (Lucky for you mostly is paid by seller)
- Stamp duty Malaysia fees
Suddenly, that carefully planned budget of yours is in chaos as you realise that you don’t have enough money to purchase your dream home after all. OMG!
Sale and Purchase Agreement, Stamp Duty, and Legal Fees for Buying a Property in Malaysia
Sale and Purchase Agreement (SPA) Legal Fees for 2022
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For the first RM500,000: 1% (Subject to a minimum of RM 500)
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For the subsequent RM500,000: 0.8%
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For the subsequent RM2,000,000: 0.7%
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For the subsequent RM2,000,000: 0.6%
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For the subsequent RM2,500,000: 0.5%
Stamp Duty Fees for Instrument of Transfer
2022
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For first RM100,000: 1%
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For RM100,001 – RM500,000: 2%
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For RM500,001 – RM1,000,000: 3%
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For RM1,000,001 and above: 4%
Legal Fees for Loan Agreement
2022
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For the first RM500,000: 1% (Subject to a minimum of RM 500)
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For the subsequent RM500,000: 0.8%
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For the subsequent RM2,000,000: 0.7%
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For the subsequent RM2,000,000: 0.6%
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For the subsequent RM2,500,000: 0.5%
Stamp Duty Fees for Loan Agreement
2022
0.5% of loan amount
What Is A Sale and Purchase Agreement?
A Sale & Purchase Agreement (SPA) is a legally binding agreement between a seller and a buyer, outlining the details of the transaction such as terms and conditions, price of the property, and all the important details the seller should know about.
The SPA is a mutual agreement between both parties, hence, it cannot be further negotiated or amended, and canceling it will result in a 10% penalty of the purchase price. Always make sure you fully understand it before signing on the dotted line!
Other details you can find in the SPA are the manner of payment, defect liability period, house/unit plan, vacant possession, and various clauses.
What Is Stamp Duty?
Stamp duty is also known as a transactional tax, or fee, for stamping transactional documents such as loan agreements, tenancy agreements, and documents pertaining to property transfer, including the SPA!
It’s also a legal requirement and must be stamped within 30 days of the signing of the SPA, or you will need to pay a penalty of 5%-20% of the deficient duty.
