Q1: What are all the possible costs and charges when I intend to buy a house or condominium?
A1: If you purchase a new house or apartment directly from a developer
- House Deposit - minimum 20% of house value or depending on the offer
- Loan application processing fee
- Monthly Installment (Loan)
- Insurance
- Stamp Duties
- Legal fees and costs
- Land office
If you purchase a sub-sale house or apartment from a vendor
- Agent's Fees
- Loan application processing fee
- Monthly Installment (Loan)
- Insurance
- Valuers' fees and costs
- Stamp Duties
- Legal fees and costs
- Land Office - title search, transfer, etc
Q2: Who are real estate agents and how much should I pay for their service?
A2: Registered Estate Agents are estate agents registered by the Board of Valuer, Appraisers and Estate Agents, Malaysia. For the latest fee chargeable by Registered Estate Agents fee, click here.
Q3: What is a valuation report and how much should I pay for a valuers fee?
A3: A valuation report is a report of survey carried out by the bank to ensure that the house's value is not less than the proposed loan. For those who are applying for housing loans from banks, a report by a Real Estate Valuation firm recognized by the banks is needed. Between of RM300 - RM800 is a normal fee for an average apartment valued.
Q4: How do I pay for the purchased unit and when should I pay?
A4: If you buy a new unit directly from a developer
The purchase price of the apartment shall be paid by you to the developer by installments as prescribed in Third Schedule of Sales and Purchase Agreement (Schedule Of Payment Of Purchase Price). Every notice referred to in the Third Schedule requesting for payment shall be supported by a certificate signed by the developer's architect in charge of the housing development.
If you buy a sub-sale house or apartment from a vendor
The purchase price of the house or apartment shall be paid as prescribed in the Sale and Purchase Agreement between you and the vendor. You should understand and agree with the payment manner and period of payment of the purchase price. Therefore, you should seek your lawyer's advice for further explanation.
| Third Schedule, Housing Developers (Control And Licensing) Regulations 1989 Schedule Of Payment Of Purchase Price |
| INSTALLMENTS PAYABLE | % | Amount |
| 1.Immediately upon the signing of this agreement | 10 | RM |
| 2.Within 14 days after receipt by the purchaser of the vendor's written notice of the completion of - |
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| (a)The work below ground level including piling and foundation of the said building comprising the said parcel | 10 | RM |
| (b)The reinforced concrete framework and floor slab of the said parcel | 15 | RM |
| (c)The walls of the said parcel with door and window frames places in position | 10 | RM |
| (d) The roofing/ceiling. Electrical wiring, plumbing (without fittings), gas piping (if any) and internal telephone trunking and cabling(if any) to the said parcel | 10 | RM |
| (e) The internal and external plastering of the said parcel | 10 | RM |
| (f) The roads, drains and sewerage works serving the said building | 15 | RM |
| 4. Upon handling over of vacant possession as in item (3) and to be held by the Vendor's solicitor as stakeholder for payment to the Vendor as follows - |
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| (a) 2.5% at the expiry of 6 months after handling over of vacant possession | 5 | RM |
| (b) 2.5% at the expiry of 12 months after handling over of vacant possession |
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| TOTAL | 100 | RM |
Q5: How can I obtain the loan to finance my purchase?
A5: If you are desirous of obtaining a loan to finance your unit, you should make an application for loan to the bank or finance company.
Q6: How much should I pay for legal fees?
A6: Firstly, there a legal fee to prepare Sale & Purchase Agreement (refer to a. for fee chargeable). Secondly, if you need a bank loan, there a legal fee for preparing the Loan Agreement (refer to a. for fee chargeable). On top of these, there are reimbursable charges such as photocopying, traveling, and stamp duty fee. Some banks offer to absorbed the Loan Agreement and related cost into their promotional mortgage plan, usually at the expense of higher interest rate.
Please be aware that the schedule for legal fees are numerous and varied, thus it is advisable to consult your lawyers for the present calculation of the legal fees. The below is only a reference legal fee:
| a. Preparation of Sale & Purchase Agreement, the transfer of the property and attending to stamping and registration.
(The fees are based on a schedule with a minimum of RM300.) |
| Consideration or adjudicated value for the first RM150,000 | 1.00 % of the purchase price |
| Consideration or adjudicated value for the next RM850,000 | 0.70 % of the purchase price |
| Consideration or adjudicated value for the next RM2,000,000 | 0.60 % of the purchase price |
| Consideration or adjudicated value for the next RM2,000,000 | 0.50 % of the purchase price |
| Consideration or adjudicated value for the next RM2,500,000 | 0.40 % of the purchase price |
| Where the consideration or adjucated value is in excess of RM7,500,000 | Negotiable on the excess but shall not exceed 0.4% of such excess |
| b. Preparation of the Loan Agreement of the property and attending to stamping and registration.
(The fees are based on a schedule with a minimum of RM300.) |
| Consideration or adjudicated value for the first RM150,000 | 1.00 % of the purchase price |
| Consideration or adjudicated value for the next RM850,000 | 0.70 % of the purchase price |
| Consideration or adjudicated value for the next RM2,000,000 | 0.60 % of the purchase price |
| Consideration or adjudicated value for the next RM2,000,000 | 0.50 % of the purchase price |
| Consideration or adjudicated value for the next RM2,500,000 | 0.40 % of the purchase price |
| Where the consideration or adjucated value is in excess of RM7,500,000 | Negotiable on the excess but shall not exceed 0.4% of such excess |
Q7: What is the loan application processing fee charged?
A7: Processing fee has to be paid upon signing the bank's letter of offer. The usual amount ranges from RM50 to RM200 per application. However, some banks do not charge for any processing fee during promotional periods.
Q8: How much should I pay for my monthly instalment housing loan to the bank or financial company?
A8: The calculation of the monthly installment is based on the duration of years of repayment while considering the current interest rates. Click here for loan calculator.
Q9: Can I apply for a loan for a sub-sale apartment?
A9: Yes, in fact, the house can be newly completed, used or under construction.
Q10: What are the procedures and documents required to apply for a housing loan?
A10: You will be required to fill in an application form for the loan with the following details:
- Personal particulars
- Particulars of employment income
- Particulars of joint applicants
- Financial particulars (monthly income and expenditure, assets and liabilities)
- Particulars of loan applied
- Details of property to be financed
- Particulars of other loans taken form other financial institutions
- Declaration
- Documents required
a) Photocopy of identity card
b) Photocopy of the Sales & Purchase Agreement
c) Photocopy of the last Form J or EA Form
d) Photocopy of the last 3 months salary slips
e) Dated letter from employer
f) Photocopy of the last 2 years profit & loss account (if-self employed)
g) Photocopy of the latest six months bank statements (if self employed)
h) Photocopy of one year (current) housing loan statement (if refinancing)
Q11: What is Mortgage Reducing Term Assurance (MRTA) and should I pay for it?
A11: Mortgage Reducing Term Assurance (MRTA) is a scheme where you are covered for the amount of the loan for the period of the loan. Mortgage Reducing Term Assurance Premium is one lump sum and very often the lending institution will arrange fire and Mortgage Reducing Term Assurance of insurance cover. If you pass away during the period of the loan the Insurance Company which issued the policy will pay the outstanding balance of the repayment to the bank/finance institution.
Q12: I am a foreigner, can I buy a house in Malaysia?
A12: Yes, you can. However any purchase of property regardless of value must be subjected to the approval of the State Government AND Foreign Investment Committee (FIC).
Q13: Does the vendor need any written consent from the developer for the sale and assignment of his/her apartment unit to me (sub-sale)?
A13: Yes, if the strata title has not been issued to the vendor. Immediately after the execution of the Sale and Purchase Agreement between you and the vendor, the vendor shall forth with apply to the Developer for written consent to the sale and assignment of the apartment unit to you. All administrative fees for obtaining the consent including the registration fees, whatever outstanding interest/charges shall be borne by the vendor.
In the event written consent is refused by the developer to the vendor, the vendor shall refund the deposit (if any) without interest to your solicitor and the Sale and Purchase Agreement between you and the vendor shall forthwith be null and void.
Q14: What is the Real Property Gains Tax?
A14: As a Malaysian citizen, you will be subjected to Real Property Gains Tax only if you sell within 5 years from the date of acquiring the property. The taxable amount is based on how long you held the property. Real property gains tax shall be retained by your solicitor. Your solicitor is authorized to pay this sum to the Director-General of Inland Revenue upon receipt of the notice of assessment to procure the Certificate of Clearance.
However, if you are not a Malaysian citizen, any disposal of the property will attract Real Property Gains Tax of 30% on the profit.
