SPA, Stamp Duty Malaysia, And Legal Fees For Property Purchase in 2024

PropertyGuru Editorial Team
SPA, Stamp Duty Malaysia, And Legal Fees For Property Purchase in 2024

In this article

Wanting to buy your first property is always an exciting, and slightly nerve-racking, experience! Here are some reasons why:
  • You’ve done your research to find the perfect area surrounded by plenty of amenities (and the neighbours aren’t weird in any way).
  • You’ve prepared a solid budget that maps out your repayments, savings, and miscellaneous expenses.
  • You’ve also selected the right bank that will provide you with a 90% margin of finance with an attractive interest rate.
“Now, what could possibly go wrong,” you think. Well, A LOT, as it seems!
Before you can even take the last step to seal that sweet deal, you discover some additional ‘hidden fees’ you overlooked. Yep, apart from the property’s down payment, there’s also the following:
Image result for noooo gif
Suddenly, that carefully planned budget of yours is in chaos as you realise that you don’t have enough money to purchase your dream home after all. Boooo!

How Am I Supposed To Know What The Rates Are?

Well, if you wanna make sure the scenario above doesn’t apply to you, you’d better check out the list of rates we’ve compiled below for your reference.
They’ll show you what to expect when it comes to the additional payments you need to make. Hopefully, you won’t be caught off-guard and have to scramble to raise enough funds on time. You’re welcome!
If the list above doesn’t scare you off, then good for you, you’re ready for what is probably the biggest financial step you’ll ever make!

What Is A Sale and Purchase Agreement?

A Sale & Purchase Agreement (SPA) is a legally binding agreement between a seller and a buyer, outlining the details of the transaction such as terms and conditions, price of the property, and all the important details the seller should know about.
The SPA is a mutual agreement between both parties, hence, it cannot be further negotiated or amended, and canceling it will result in a 10% penalty of the purchase price. Always make sure you fully understand it before signing on the dotted line!
Other details you can find in the SPA are the manner of payment, defect liability period, house/unit plan, vacant possession, and various clauses.
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What Is Stamp Duty?

Stamp duty is also known as a transactional tax, or fee, for stamping transactional documents such as loan agreements, tenancy agreements, and documents pertaining to property transfer, including the SPA!
It’s also a legal requirement and must be stamped within 30 days of the signing of the SPA, or you will need to pay a penalty of 5%-20% of the deficient duty.
Infographic on the sale and purchase agreement, stamp duty and legal fees for purchasing a property in Malaysia 2020

How To Calculate Stamp Duty Fees

For Instrument of Transfer – Memorandum of Transfer (MOT) or Deed of Assignment (DOA):
Price of Property
First RM100,000
RM100,001 – RM500,000
RM500,001 – RM1,000,000
Above RM1,000,001
For example, the purchase of a property worth RM500,000 would put you in the first two tiers, hence, 1% of RM100,000 and 2% of RM400,000.
  • 1% of RM100,000 = RM1,000
  • 2% of RM400,000 = RM8,000
  • Total stamp duty fees: RM9,000

PropertyGuru Tip

The stamp duty for a Sale and Purchase Agreement is often mistaken for the stamp duty for Instrument of Transfer. The stamp duty for the SPA is only RM10 per copy, while the stamp duty for MOT and DOA is calculated according to a fee structure of 1% to 4%.

Stamp duty also applies for loan agreements, but it is capped at a maximum rate of 0.5% of the full value of the loan.
By purchasing an RM500,000 property with a 90% loan (since 10% of it will be the down payment), the loan amount would be RM450,000.
  • 0.5% x RM450,000 = RM2,250 total stamp duty fees
Legal fees are part of the SPA and is basically a charge for engaging legal assistance for the purchase of a property. Typically, the solicitor will be assigned by the seller, but should the buyer choose to pick their own representative, it is allowed.
At times, developers may also choose to absorb the legal fees to reduce the buyer’s financial worries.
Consideration / Loan ValueSRO 2023
Scale of fees for SPA and Loan Agreement
First RM500,0001.25% (subject to minimum of RM500)
For the next RM7,000,0001.00%
Where the consideration / loan sum is in excess of RM7,500,000Subject to negotiation on the excess but shall not exceed 1% of such excess
Discount eligible for SPA / Loan Agreement under the Housing Development (Control & Licensing) Act (‘HDA’)
RM500, if consideration / loan is RM50,000 or below
75% of the applicable fee if consideration / loan is more than RM50,000 but less than RM250,000
70% of the applicable fee if consideration / loan is more than RM250,000 but less than RM500,000
65% of the applicable fee if consideration / loan is more than RM500,000 but less than RM1,000,000
50% of the applicable fee if consideration / loan is more than RM1,000,000
For a property bought at RM500,000 under HDA, the legal fees would be:
Fees for non-HDA transactions
Discount for HDA transactions
Fees for HDA transactions

Stamp Duty Exemption For Your First Home

During the tabling of Budget 2023, the Malaysian government announced stamp duty exemptions for first-time homebuyers!
The full stamp duty exemption will be given to both instruments of transfer and loan agreement for the purchase of a first home worth RM500,000 and below until 2025.
Yup, that means it’s full exemption for the stamp duty on both instrument of transfer and loan agreement if your property price is RM500,000 and below!
That’s a maximum of RM11,250 savings! The detailed calculation as follows:
Stamp duty for instrument of transfer + Stamp duty on loan agreement = Total stamp duty to be paid
[(First RM100,000 x 1%) + (Next RM400,000 x 2%)] + 0.5% of loan amount, assuming 90% of property price (RM450,000)
= (RM1,000 + RM8,000) + (0.5% x RM450,000)
= RM9,000 + RM2,250
= RM11,250
Disclaimer: The information is provided for general information only. PropertyGuru International (Malaysia) Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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Frequently Asked Questions About SPA, Stamp Duty, and Legal Fees in Malaysia

Stamp duty fees are typically borne by the buyer rather than the seller in Malaysia.

A tenancy is for a period up to three years, any longer than that, it becomes a lease according to the National Land Code which applies in peninsular Malaysia only.