Legal Fees and Stamp Duty Calculator Malaysia: Fees for Property Purchase
When a buyer decides to buy a property, there are some basic costs to be incurred for the property purchasing process
These include legal fees, stamp duties, and other costs. We will explain what are legal fees and stamp duties and the calculation.
Legal Fees
In property sales transactions, both buyer and seller usually appoint their lawyer to help them with the process: firstly, for the purchase of the property and secondly, usually to get a mortgage loan from the lender such as a bank to finance the purchase of the real estate.
The lawyers may charge for their services and the charges for the real estate transaction include:
Legal Fees: The lawyers charge this fee for their services such as giving legal advice, representing the clients in the process, and preparing documents.
Disbursements: These Include expenses like filing charges, postage, and photocopying incurred by the lawyer on the client's behalf
The legal fees in Malaysia charged by the solicitors for the purchase (that is for the sales and purchase agreements-SPA) and for the financing (that is for the loan agreements) are calculated according to the 1st Schedule of the Solicitors Remuneration Order 2023
The exact computation is shown below.
1.Sales and Purchase Agreement
| Purchase Price or Adjudicated Value | Scale fee |
|---|---|
| For the first RM500,000 | 1.25% (subject to a minimum of RM500) |
| RM 500,001 to RM 7,500,000 | 1% |
| Any amount exceeding RM7,500,000 | Subject to negotiation on the excess but shall not exceed 1% of such excess |
2. Loan agreement: The calculations of the legal fee for loan agreements, including home loans are based on the below standard scale fees:
| Amount of loan | Scale fee |
|---|---|
| For the first RM500,000 | 1.25% (subject to a minimum of RM500) |
| RM 500,001 to RM 7,500,000 | 1% |
| Any amount exceeding RM7,500,000 | Subject to negotiation on the excess but shall not exceed 1% of such excess |
The above legal fee calculation method applies to the sale and purchase of properties in Malaysia. You can use our legal fee calculator Malaysia above to calculate the legal fees.
Furthermore, any buyer may consider getting a comprehensive home loan eligibility report to get the estimated interest percentage for the mortgage loan.
As for the seller, they may need to pay some real property gain tax if they sell the property within 5 years of purchase.
Stamp duties
Ad valorem stamp duty (in Bahasa Malaysia, it is known as ‘setem duti’) are duty charged by the Malaysian government for the adjudication of any document that is chargeable with the duties.
These chargeable documents include sale and purchase agreements (SPA) and loan agreements and these duties are paid by the buyer.
The stamp duty Malaysia calculation for property acquisition depends on mainly 2 factors:
Type of document: The stamp duty rates for sale and purchase agreements and loan agreement is based on different rate and follow the 1st Schedule of the Stamp Act 1949.
Purchase price or market value of the property, whichever is higher. For sale and purchase agreements, the duties will be based on the purchase price or market value of the property assessed by the Lembaga Hasil Dalam Negeri, whichever is higher.
In some cases, Lembaga Hasil Dalam Negeri (LHDN), the assessing authority may assess the market value of the property to be higher than the purchase price.
After one has submitted the sale and purchase agreements to LHDN for adjudication (usually done by the buyer’s lawyer), and after the property stamp duty is adjudicated, the buyer must pay the amount within 30 days of the adjudication.
If the buyer does not pay the amount or pay deficient duty, it may cause the transfer of the properties to be delayed.
You may calculate the duties for your property transfer transaction using our legal fees calculator Malaysia above. This calculator is sometimes known as “stamp duty calculator Malaysia/mot calculator” as it calculates the stamp duty for memorandum of transfer/mot, that is the main instrument for the property transfer.
The stamp duty calculation method is based on the below formula:
1.Sales and purchase agreement
| The purchase price or market value of the property, whichever is higher (‘Adjudicated value’) | Stamp Duty (% of the adjudicated value)’) |
|---|---|
| First RM 100,000’) | 1% |
| RM 100,001 to 500,000’) | 2% |
| RM 500,001 to RM1,000,000’) | 3% |
| Any amount exceeding RM1,000,000’) | 4% |
2.Loan agreements stamp duty: The standard stamp duty for loan agreement Malaysia (including home loans) based on this calculation formula: 0.5% of the total loan amount
Frequently asked questions
Where can I find the tenancy stamp duty calculator?
You can get the calculations for stamp duty for tenancy agreement using our tenancy agreement stamp duty calculator.
Disclaimer:
Our legal fees and stamp duty calculator Malaysia offers an estimate of expenses and might not correctly represent the completeness and accuracy of the calculations.
Please note that we shall not accept any liability or be responsible for any loss or damages suffered; howsoever arising due to any inaccurate terms, information, or contents in this calculator on our website, as a result of your reliance.