If you are a foreigner intending to purchase property in Malaysia on a sub-sale basis (e.g. not directly from a developer), you may need to factor in other related incidental costs that will typically be incurred before purchasing a property, as most of these incidental costs will need to be paid in full to the solicitor handling your matter simultaneously upon signing of the agreement. This cash outlay required is in addition to the balance first 10% of the purchase price that is usually payable on signing. This article will take you through some of the major incidental costs that may be applicable to you as a purchaser.

Real Estate Negotiator’s Fees

Either a seller or a purchaser (or both!) can engage the services of a real estate agent and pay the standard fee prescribed by the Valuers, Appraisers, Estate Agents and Property Managers Act 1981. In Malaysia, the real estate negotiator’s fees or commission is typically paid by the seller. However, if the purchaser wishes to engage their own real estate negotiator to represent their exclusive interests, the negotiator’s fees are set at a maximum of 3% of the property’s sale price. If there are 2 different real estate negotiators, the fees are usually shared on a co-broking basis.

For peace of mind, the purchaser can verify if the real estate negotiator is registered with the Malaysian Institute of Estate Agents (MIEA). You can do an online search here. Purchasers may also request that the negotiator produce his REN Tag, which is an identification issued to a negotiator providing details about the negotiator and his company. This tag should typically be worn by the negotiator whilst on duty.

Property Valuer’s Fees

If a loan is required to finance the property purchase, the bank will insist on a professional valuation report to be prepared by a licensed property valuer. The fees payable for the valuation report is chargeable on a decreasing scale ranging from 0.25% to 0.04% of the property value. Your banker providing the loan can usually introduce a valuer to you. As for timing of payment, the valuer’s fees typically need to be paid directly to the valuer after the valuation report is delivered. This can sometimes happen after the sale and purchase agreement is signed, when the purchaser has full certainty that the transaction is proceeding ahead.

Legal Fees

The legal fees for the solicitors handling (i) the sale and purchase of property and separately (ii) the loan financing (if any), are imposed on a scale rate pursuant to the Solicitors Remuneration Order, which are based on the value of the property and loan financing amount respectively:

Consideration or Adjudicated Value / Amount Secured or Financed Scale of fees
For the first RM 500,000 1%
For the next RM 500,000 0.8%
For the next RM 2,000,000 0.7%
For the next RM 2,000,000 0.6%
For the next RM 2,500,000 0.5%
Where the consideration or the adjudicated value is in excess of RM 7,500,000 Negotiable on the excess (but shall not exceed 0.5% of such excess)
Stamp Duty

Stamp duty is essentially a tax imposed on documents. When purchasing a property, stamp duty will be payable on various documents, some at nominal rates of RM 10, while others at ad valorem rates (effectively a %) based on the property value or the loan amount. The highest stamp duty rates are imposed on two main documents, the transfer instrument and the loan agreement.

Stamp duty on the transfer instrument used to convey ownership from seller to the purchaser will be imposed at stepped rates of 1% to 4% based on the value of the property. The stepped rates as at 2020 are as follows:

Property price Rates
First RM 100,000 1%
Next RM 400,000 2%
Next RM 500,000 3%
Anything above RM 1,000,000 4%

The stamp duty for the loan facility agreement is imposed at a flat rate of 0.5% of the loan sum, if bank financing is obtained. There are, from time to time, stamp duty exemptions applicable on specific types of property purchasers. However, it is unlikely that such stamp duty exemptions will be extended or available to foreigner purchasers.

Registration & State Consent Fees

Registration fees are payable to the land authority for the purchase of properties with issued titles or strata titles. These fees are usually quite nominal.

However, in some states such as Selangor, the registration fees payable to the land authority are linked to the value of the property, which is capped at a maximum of RM 1,500. For foreign purchasers of property, separate fees or levies are payable to obtain ‘foreigner state consent’ and approvals as part of the acquisition process. In Johor, the levy payable can be as high as RM 20,000 or 2% of the property value, whichever is higher.

Therefore, as a foreigner purchasing any property in Malaysia, be prepared to set aside sufficient cash for the incidental costs that will be incurred depending on the specifics of your sub-sale transaction, to avoid any unanticipated cash outlays and worse, delays to your completion time frame which may result in late interest charges being payable to the seller.


This article was written by Shawn Ho (Partner) & Suzanne Fam (Senior Associate) from the corporate practice group of Donovan & Ho.  Shawn leads the corporate practice group of Donovan & Ho, and has been recognised as a Notable Practitioner, whilst the firm has been recognised as a Notable Firm for Corporate and M&A by Asialaw Profiles 2020.  We are also ranked as a Recommended Firm by IFLR1000 2020.

Our corporate practice group advises on corporate acquisitions, restructuring exercises, joint venture arrangements, shareholder agreements, employee share options and franchise businesses, Malaysia start-up founders and can assist with venture capital funds in Seed, Series A & B funding rounds. We also advise on property transactions and real-estate related tax planning. Feel free to contact us if you have any queries.


Cash Flow & Timing of Sub-Sale Property Purchase in Malaysia
Foreigners Investing in Malaysian Property

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