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Others Information (Tax & Fees to Own Property in Malaysia)

Malaysia Stamp Duty And Other Property Ownership Costs

(Useful guide for foreign buyers)

Property acquisition costs are low in Malaysia, only approximately 2.5 to 3.5% of the property purchase price. There are:

1a. Legal Fees on SPA

1b. Disbursement charges on SPA (approximately RM2,500)

2a. Legal Fees on Loan Documentations

2b. Disbursement charges on loan documentations (approximately RM2,500)

3. Stamp Duty on Loan Agreement (0.5% of loan amount)

4. State Consent Fee For Foreigners

1a. Legal Fees on SPA is calculated based on the table below:

Value of property / loan amount
Rate
1st RM150,000 1.00%
Next RM850,000 0.70%
Next RM2,000,000 0.60%
Next RM2,000,000 0.50%
Next RM2,000,000 0.40%
Over RM7,500,000 (negotiable) >0.40%

 

1b. The disbursement charges on SPA is approximately RM2,500

2a. Legal Fees on Loan Documentations is calculated based on the table below:

 

Value of property / loan amount
Rate
1st RM150,000 1.00%
Next RM850,000 0.70%
Next RM2,000,000 0.60%
Next RM2,000,000 0.50%
Next RM2,000,000 0.40%
Over RM7,500,000 (negotiable) >0.40%

2b. The disbursement charges on Loan Documentations is approximately RM2,500

 

3. Stamp duty on Loan Agreement is approximately 0.5% of the loan amount (RM5 per RM1,000)

 

4. State Consent For Foreigners

Foreigners are required to obtain approval from State Authorities who will consider factors such as location of the property, type of property and in some new developments the percentage of total units sold to foreigners.

Currently, these are the State Consent fees:

State
State Consent
Johor Bahru (Iskandar) RM11,000 approximately
Kuala Lumpur RM1,000 approximately
Penang RM11,000 approximately

 

An Example

  • Assumptions: a JB property of RM1 mil at 80% bank loan
No.
Acquisition Costs
Amount
1. Legal fees on SPA RM7,450
2. Disbursement charges on SPA RM2,500
3. Legal fees on loan documentations RM6,050
4. Disbursement charges on loan documentations RM2,500
5. Stamp Duty on Loan Agreement RM4,000
6. State Consent RM11,000
Total RM33,500

 

Malaysia Stamp Duty And Other Costs:

1. Stamp Duty on Title, Also known as Memorandum of Transfer

(Payable upon issuance of title)

  • This is payable upon issuance of title, usually 2 to 5 years after the construction of the property is completed and keys are handed over
  • If the original owner of the property sells it upon collection of keys before the issuance of title, the next buyer will be one paying this amount
  • Rate is calculated based on the original Purchase Price
Value
Rate
1st RM100,000 1%
Next RM500,000 2%
Amount thereafter 3%

 

2. Malaysia Real Property Gains Tax

(Applicable upon the sale of the property)

  • Effective from 1 January 2014, gains from the sale of residential properties are taxed between 0% and 30% depending on the holding period of real properties as follows:

2014 RPGT

 Medini Special Incentive: Zero Real Property Gains Tax for properties in Medini, Iskandar up to 2020

Note:

  • Generally, sub-sale/resale of properties under construction is restricted in Johor Bahru, Kuala Lumpur and Penang
  • Penang state government restricts resale / sub-sale within 3 years from date of purchase (date of Sale & Purchase Agreement)

Malaysia Property Maintenance Costs

1. Maintenance / Management / Service Charges:

  • Calculated on per square foot basis
  • Management Corp / JMB will also bill master fire insurance (once a year), sewerage charges twice a year (approx RM50 each billing)

2. Property Tax :

(a) Assessment Tax payable to the local council:

  • Property Assessment on the value of the property is performed by the local authorities / councils. It is payable on a half yearly basis and estimated to be approximately RM400 to RM1,500 each time

(b) Quit Rent levied by the state government

  • Payable once a year, estimated from RM100 to RM250

3. Income Tax (if property purchased is used for rental income)

  • Non-Resident Individual Tax Rate is 26%. This is assessed on net rental income (less deductible expenses such as maintenance charges, assessment, bank interests, estate agency fees etc)

 

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