LEGAL FEES & STAMP DUTY: HOW MUCH DO YOU NEED TO PAY?
If you’re buying or renting a property in Malaysia, there are extra costs to consider besides the purchase price or rental amount. The two main ones are legal fees and stamp duty.
1. LEGAL FEES
Legal fees are what you pay to a lawyer for preparing and handling legal documents like the Sale and Purchase Agreement (SPA), Loan Agreement, or Tenancy Agreement.’
A. Property Purchase (General Transactions)
For sub-sale or commercial property transactions, the legal fees are set under the Solicitors’ Remuneration Order (SRO) 2023:
B. Developer Sales
In the case of transaction governed by the Housing Development (Control and Licensing) Act 1966, the remuneration of the solicitor having the conduct of and completing the transaction, shall be as follows:
C. Tenancy Agreements
When renting, legal fees cover the preparation or review of your tenancy contract. These fees are usually based on your monthly rental amount:
The above fee calculations provided above are estimates for the principal documents only, namely the Sale and Purchase Agreement, Loan Agreement, and Tenancy Agreement. Additional legal documents such as Consent to Transfer and Charge, Statutory Declarations, CKHT forms, and others may incur separate charges. For an accurate and comprehensive quotation tailored to your specific transaction, it is advisable to consult a qualified lawyer.
2. STAMP DUTY
Stamp duty is a tax imposed by the government to legally validate property documents like the Memorandum of Transfer (MOT) or Deed of Assignment (DOA). It’s payable whenever ownership of property changes hands or when a tenancy agreement is signed.
A. Stamp Duty on Property Purchase
Stamp duty is calculated based on the property price or market value — whichever is higher — according to a tiered system:
B. Stamp Duty on Tenancy Agreements
For tenancy agreements, stamp duty is based on the total annual rent stated in the contract. The first RM2,400 of the annual rent is exempt from stamp duty. Beyond this, every RM250 (or part thereof) is subject to stamp duty based on the lease duration:
EXAMPLE BREAKDOWN:
Property Purchase Price: RM600,000.00
Loan Amount: RM540,00000 (90%)
Total legal fees and stamp duty payable would be RM28,600.00.
STAMP DUTY EXEMPTIONS
Stamp duty exemptions are special waivers or reductions granted by the Malaysian government to lessen the financial burden on eligible individuals or transactions. If you are a Malaysian buying your first residential property, you may be eligible for 100% exemption on stamp duty for both the MOT/DOA and the Loan Agreement.
These exemptions are governed by:
- P.U.(A) 53/2021 – Stamp Duty (Exemption) Order 2021 (Instrument of Transfer)
- P.U.(A) 54/2021 – Stamp Duty (Exemption) (No. 2) Order 2021 (Loan Agreement)
These exemptions are not automatic. You must meet specific conditions set by the government:
- The agreements are executed between 1 January 2021 and 31 December 2025
- The property is a residential property (excludes SOHO, SOFO, SOVO, and commercial serviced residences).
- You are a Malaysian citizen buying your first residential property.
- You do not own any other residential property, including inherited or gifted properties.
