Malaysia Affordality Initial Buying Cost with Legal Fee & Stamp Duty

Affordality Initial Buying Cost

In Malaysia, the initial buying cost of a property typically includes the following components:

1. Property Price

The actual price of the property you're purchasing.

2. Stamp Duty

Stamp duty is charged on the property purchase price or the market value (whichever is higher) and is calculated as follows:

1% for the first RM 100,000

2% for the next RM 400,000

3% for the remaining amount above RM 500,000

For example, for a property priced at RM 600,000:

1% on RM 100,000 = RM 1,000

2% on RM 400,000 = RM 8,000

3% on RM 100,000 = RM 3,000

Total stamp duty = RM 12,000

3. Legal Fees

The legal fees for the sale and purchase agreement (SPA) are calculated based on the property price and are subject to the following scale:

1% on the first RM 500,000

0.7% on the next RM 500,000

0.6% on amounts above RM 1 million

Example for a property priced at RM 600,000:

1% on RM 500,000 = RM 5,000

0.7% on RM 100,000 = RM 700

Total legal fees = RM 5,700

4. Disbursement Fees

These are costs associated with the legal work, including document registration, land search, and other administrative fees. This can vary, but typically it ranges from RM 500 to RM 1,000.

5. Valuation Fees (Optional)

If you require a property valuation for a mortgage, the fees will depend on the value of the property. Typically, the fee is around RM 300 to RM 1,000 or a percentage of the property's value.

6. Other Possible Costs

Mortgage arrangement fees (if applicable)

Insurance premiums for the property

Title transfer costs (if applicable)

Example of Initial Buying Cost for RM 600,000 Property:

Property Price: RM 600,000

Stamp Duty: RM 12,000

Legal Fees: RM 5,700

Disbursements: RM 800 (estimate)

Total Initial Buying Cost: RM 600,000 + RM 12,000 + RM 5,700 + RM 800 = RM 618,500

NOTE This is a general breakdown. Actual costs may vary depending on your specific transaction details and location.

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