October 17, 2023
Purchasing a property in Malaysia can be a significant investment, and it is essential to understand the various costs associated with it. In addition to the purchase price, there are several hidden charges that buyers should be aware of to avoid any surprises down the road. In this blog, we will discuss some of the hidden charges when purchasing a property in Malaysia.
Stamp duty is a tax levied on legal documents, including property purchases. In Malaysia, stamp duty is calculated based on the purchase price of the property and ranges from 1% to 4%. For properties valued at RM1 million and above, the stamp duty is 4%. Buyers should be aware that stamp duty is a significant cost and should be factored into their budget.
Legal fees are the charges for engaging a lawyer to handle the legal aspects of the property purchase. These fees are typically calculated based on the purchase price of the property and can range from 0.4% to 1% of the purchase price. It is essential to engage a reputable lawyer to ensure that the legal process is smooth and hassle-free.
Valuation fees are charges for a professional valuation of the property. The valuation report is required by banks before approving a loan, and the fees can range from RM200 to RM1,000 depending on the property's value. It is advisable to engage a licensed valuer to ensure that the valuation report is accurate and reliable.
Loan Agreement Fees
Loan agreement fees are charges for the preparation of the loan agreement between the buyer and the bank. These fees are typically calculated based on the loan amount and can range from RM500 to RM1,500. Buyers should be aware that loan agreement fees are separate from legal fees and should be factored into their budget.
Property insurance is an essential aspect of property ownership, and buyers should ensure that they have adequate coverage. Property insurance premiums are calculated based on the property's value and can range from RM500 to RM2,000 per year. It is advisable to shop around for the best insurance coverage and premiums.
In conclusion, purchasing a property in Malaysia involves several hidden charges that buyers should be aware of. Stamp duty, legal fees, valuation fees, loan agreement fees, and property insurance are some of the costs that buyers should factor into their budget. By understanding these hidden charges, buyers can make informed decisions and avoid any surprises down the road.