Costs involved in buying a property in Malaysia

• Buying a property in Malaysia? Don't overlook legal fees, mortgage costs, and maintenance charges. Read our guide to budget smartly before you commit.

Buying a property is a significant financial commitment, but many homebuyers focus solely on the property price while overlooking additional costs. These related expenses can impact affordability and should be factored into financial planning. Understanding all costs associated with purchasing a home ensures that buyers are well prepared for their investments.

Here is a list of some of the major costs.

1. Down payment

One of the first major costs when buying a home in Malaysia is the down payment. Typically, Malaysian buyers are required to pay 10% of the property price upfront. However, some developers offer zero down payment schemes, especially for new projects, but these often come with specific terms and conditions.

For those looking at properties in prime locations such as Old Klang Road or Kenny Hills Bukit Tunku, both in Kuala Lumpur, being financially ready for the initial payment is crucial as property prices in these areas tend to be higher.

2. Legal fees and stamp duties

Sale and purchase agreement (SPA), legal fees

When purchasing a property, buyers must sign a sale and purchase agreement (SPA). While a mere RM10 stamp duty applies to the SPA, the legal fees are quite substantial, and is structured as follows: 

• First RM500,000—1.25% (subject to minimum of RM500)
• Next RM7 million—1% 
• Above RM7,500,000—negotiable, but capped at 1% of the excess

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Increase in legal fees will, however, be set off by (legal) discounts

Stamp duty on property transfer

The stamp duty on the memorandum of transfer—where the buyer receives the title from either the developer or seller that marks the buyer’s official ownership of the property—is another significant cost: 

• RM100,000 and below:          1%
• RM100,001–RM500,000:       2%
• RM500,001–RM1 million:       3%
• Above RM1 million:                4%

Buyers interested in landed properties in areas like Taman Pertama, KL should factor in these legal costs to determine total affordability.

From time to time, the government also grants stamp duty exemptions to encourage homeownership. Currently, first-time buyers of homes priced RM500,000 and below can enjoy full stamp duty exemption till Dec 31, 2025.

Loan agreement stamp duty and legal fees

When you take out a loan to finance your home, you need to pay additional fees, including:

• Loan stamp duty: 0.5% of the total loan amount
• Loan agreement legal fees: First RM500,000—1.25% (subject to minimum of RM500); next RM7 million—1% 

Valuation fee

If you buy a subsale home, the bank may require an independent valuation to determine the market value of the property before approving your loan. In this case, you have to pay the valuation fee based on the property’s market value as follows:

• First RM100,000—0.25% 
• Next RM2 million—0.20% 
• Next RM7 million—0.167%
• Next RM15 million—0.125% 
• Next RM50 million—0.10% 
• Next RM200 million—0.067% 
• Next RM500 million—0.05%
• Above RM500 million—0.04%

These expenses are part of the process in securing financing smoothly. 

3. Renovation and moving costs

Newly purchased homes, whether in the primary or sub-sale market, usually come with just the basics of floor, wall, ceiling, and main electrical points. However, nowadays, many new developments do offer fully- or partially-furnished packages. Even so, you would need to allocate a budget for other common expenses including:

• Renovations (cabinets, furniture and fittings, mechanical and electrical (M&E), etc)
• Interior design (optional) 
• Moving services and transportation fees
• Utility deposits (electricity, water, internet)

Alternatively, cut down the hassle by buying ready-furnished units like those in Bukit Jalil or   Damansara Heights.

4. Recurring homeownership expenses

Beyond the upfront costs, homeowners should prepare for recurring expenses, including:

• Mortgage repayments: Monthly payments include both principal and interest.
• Insurance (MRTA/MLTA): Mortgage Reducing Term Assurance (MRTA) or Mortgage Level Term Assurance (MLTA) protects homeowners in case of unforeseen circumstances like death or disability. If you have not purchased this separately, most banks these days offer this as a package together with the home loans, which is included in your monthly instalments. 
• Maintenance fees and sinking fund: These monthly fees are mandatory for condominiums and strata properties. They’re calculated based on the size of your unit, usually ranging from RM0.20 to RM0.80 psf. Additionally, the sinking fund, usually calculated on 10% of the total maintenance fee, is collected separately for long-term repairs and upgrades to shared facilities. 
• Quit rent of RM0.01–RM0.35 psf/year (different states have different rates) and assessment tax (2–7% of annual rental value) are to be paid to the local councils annually. In areas like Damansara Damai, Petaling Jaya, quit rent might cost RM100–RM300 annually, while assessment tax can range from RM300 to over RM1,000 for condos.

As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.