When you’ve decided on selling a property – be it an exciting moment for new sellers or a bittersweet memory for those departing from a childhood home, you’ll have to pay certain fees before your property becomes someone else.
Costs such as property agent fees, Real Property Gains Tax, and more comes to play, and you’re in luck, we have the guide for you!
Property Investment in Malaysia
1. Legal fees
After securing a buyer for your property, your lawyer will draft the Letter of Offer and the Sales and Purchase Agreement – they will also handle other legal matters associated with the sale.
An example of the calculation is tabulated in the table below:
|For the first RM500,000 (price of the property) – 1.0% (rate)|
|For the next RM500,000 – 0.8%|
|For the next RM2,000,000 – 0.7%|
|For the next RM2,000,000 – 0.6%|
|For the next RM2,500,000 – 0.5%|
If your selling price is RM2 million, the calculation is as follows:
|The first RM500,000 would be one per cent for RM5,000.|
|The next RM500,000 would be 0.8 per cent for RM4,000.|
|The remaining RM1 million would be 0.7 per cent for RM7,000.|
2. Real Property Gains Tax
Shorten as R-P-G-T, and it is a necessary tax you need to pay to the government when you wish to sell your property – be it landed or high-rise.
By paying the tax, you’ll gain any profits from the sale of your property in Malaysia. But there will be no tax to be paid if there’s no profit to be made or when you received a loss from the sale.
But how does one calculate RPGT?
- What is your chargeable gain? [Difference between the purchase price of your property and its sale price]
- Multiply this with the relevant rate for your RPGT.
If your chargeable gain is lower and you take longer than 5 years to sell your property, the RPGT would be reduced.
Regardless of whether you are Malaysian or not, this tax applies to anyone who’s profited from selling any Malaysian properties.
You will only be exempted by RPGT if;
- A once-in-a-lifetime exemption on any chargeable gain from the disposal of a private residence
- Exemptions on the first RM10,000 or 10% of the profit gained, whichever is higher.
- When a property is transferred by way of a gift between immediate family members
*As of the Budget 2021 announcement, the extension of the stamp duty exemption on loan agreement and MOT given to rescue contractors and original buyers of abandoned houses have been extended from January 2021 to December 2025.
3. Property Agent Malaysia Fee
When hiring a property agent, who will receive the all-in-one service package such as pricing and advertising your property, arranging for viewing the property, and negotiating with the potential buyers on behalf of the seller.
The real estate agent of your choice will charge a commission – usually 2-3% of the property’s selling price and capped at 3%.
Your property agent may also charge you for additional costs such as marketing materials and transport, but they should let you know about these charges beforehand.
4. Fees for renovation and repairs
Spending to make your property presentable and appealing to your target buyers will help bring up its value and get it sold in a flash!
Try a fresh coat of paint in the living room to picture how a family can spend their free time, or a whole new decor in the master bedroom to entice a new couple to find their perfect home.
You’ll also want to repair minor inconveniences such as leaking pipes, wonky doors, or small cracks in the walls to ensure a satisfied buyer, not including plant and machinery.
You could also consider hiring a professional cleaning service to give it a good cleanse – ready for its new owners to move in the next day.
Now you are ready to sell your property!
After determining your house’s value and calculating the necessary fees, congratulations are in order as you are one step closer to finding the perfect buyer! The next step is to let people know that it’s for sale.
Try advertising it via social media or the traditional way by getting your friends and family to spread the news via word-of-mouth.
Either way, we wish you the best of luck!
Can Foreigners Buy Properties in Malaysia?
Yes, there are foreign properties in Malaysia. Foreigners are able to own 100% of the property as long as the requirements are met. Foreigners can buy all property except that valued below RM 1 million.
How Much Is The Estate Agency Fee?
The Malaysian Institute of Estate Agents (MIEA) makes a statement that sale and purchase land & buildings a maximum of 3% of the sale price of the property. However, the above scale of fees shall not apply to foreign properties in Malaysia.
Does Malaysian Property Agent Have Basic Salary?
Property agent salary only depends on closing deals. An agent only earns by completing a greater number of property deals.
Interested in selling your property? Or you’re seeking professional help in ensuring you find the perfect buyer?
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