Property FAQ
1. How much is the legal fees for purchasing a property?
- For the first RM500,000, the legal fees payable is 1%
- For the next RM500,000, the legal fees payable is 0.8%
- For the next RM2,000,000, the legal fees payable is 0.7%
- For the next RM2,000,000, the legal fees payable is 0.6%
- Thereafter, the legal fees payable is 0.5%
Exp: if the purchase price is RM1,250,000.00
Total legal fees payable: (RM500,000 X 1%) + (RM500,000 X 0.8%) + (RM250,000 X 0.7%) = RM 10,750.00
2. How much is the Real Property Gain Tax (RPGT)?
| Malaysian | Company | Non-Malaysian | |
| Disposed within 3 years | 30% | 30% | 30% |
| Disposed in 4th year | 20% | 20% | 30% |
| Disposed in 5th year | 15% | 15% | 30% |
| Disposed after 5 years & above | 0% | 5% | 5% |
3. What’s the different between freehold and leasehold?
| Nature | Leasehold | Freehold |
| Tenure | Lease duration is usually30,60, 99 & 999 years | Duration limited by town planning authorities |
| Approvals Required | Lease transfers require State or its equivalent approval | Few limitations on transfer of property |
| Ownership rights | You just have the lease of the freeholder or Landlord to use the home/property for “N” number of years | You own the building and the land it stands on outright, in perpetuity |
4. What’s the difference between the residential title and commercial title?
i) You can do anything you like in your house, i.e. host a party, call guests over, buy whatever furniture you want – most importantly you can sleep there without being chased out
ii) You are not bound by law to have a working water sprinkler in your house in case of a fire
iii) It is not compulsory for you to have fire insurance in case your property burns down
iv) You can have a proper kitchen, not just a pantry
v) You are not allowed to convert your house into an office or a shop, you will need special approval and permits for that
vi) Most importantly, your water, electricity, Indah Water, quit rent and assessment fees follow residential (cheaper) rates
Commercial Title
i) You are not allowed to convert your property into a house, i.e. no hosting parties, no moving a bed and wardrobe in, and if anyone catches you sleeping and living in your office like it’s your house, legal action can be taken against you
ii) It is compulsory for all commercial properties to have water sprinklers as ruled by the Bomba department
iii) It is compulsory for all commercial properties to have fire insurance in case the property burns down as ruled by the Bomba department
iv) Commercial properties are only allowed to have a pantry, not a kitchen (restaurants are exceptions with special approval)
v) Most importantly, the water, electricity, Indah Water, quit rent and assessment fees follow commercial (more expensive) rates
5. I’m a foreigner and I would like to purchase a property in Malaysia, what should I do?
6. What are the requirements for the loan application?
- Age of 18 & above
- Malaysia citizen
- Have a regular income
- Have a working bank account
- Salaried individuals
- EPF and/or income tax (if any)
7. What’s the different between MRTA and MLTA?
| MRTA | MLTA | |
| Purpose | Protection | Protection saving and cash value |
| Protection | Sum insured reduce accordingly to loan tenure | Sum insured remains the same on a fixed level sum assured basis |
| Transferable | No | Yes |
| Nomination | Beneficiary is bank | Beneficiary can be anyone |
| Financing | Usually financed into home loan | Usually self-financed |
| Payment | Lump sum | Periodic (monthly, quarterly, semi-annually, or annually) |
| Premium | Low | High |
| Cash value | No. It has a reducing cash value, which drops to RM0 at the end of the loan tenure. | Yes. It has a fixed cash value (guaranteed) throughout the loan tenure. |
| Claim | Insurance company will pay the loan balance to the bank and beneficiary will receive the home | Insurance company will pay the loan balance to the bank and beneficiary will receive the home plus cash |