General procedure in property purchase, what are the steps involved and time line.
- Keen to purchase a property and has verbally confirmed the price by vendor/agent.
- Sign Offer of Letter with major terms and price agreed by both vendor & purchaser. Upon signing, purchaser pays 3% of the agreed sale price as earnest deposit. This deposit will be held by the registered estate agent as stakeholder.
- Within 14 working days, the purchaser is expected to execute the Sale & Purchaser Agreement (SPA) and pays the balance of first 10% of the Sale Price (inclusive of the 3% paid earlier).
- The purchaser can start to enquire about loan and the Balance of Purchase Price will be required to be paid in full within 3 months from the signing date of SPA or state authority consent (applicable to leasehold property or purchased by foreigner) or developer consent (if still under master title), whichever is later.
- Sale completed after payment and name transfer to be done by purchaser’s lawyer. Generally will take approximately 3.5 months from offer letter signing if is freehold property, local purchaser and no other conditions need to be fulfilled.
Other Costs (On top of Purchase Price)
Stamp duty paid by purchaser to Inland Revenue Board (IRB) for transfer/assignment of property is as follows:-
- First RM100,000 = 1%
- For the next RM400,000 = 2%
- In excess of RM500,000 = 3%.
Stamp duty fee for additional copies of Sale & Purchase Agreement is RM10.00 per copy.
Stamp duty for loan agreement will be as follows:-
- 0.5% of the loan amount
Calculation of Legal Fees (Effective 15th March 2017)
Legal fees which is applicable for Sale & Purchase Agreement and Loan Agreement are as follows:-
- First RM500,000 of purchase = 1%
- RM500,000 above to RM1,000,000 = 0.8%
- RM1,000,00 above to RM3,000,000 = 0.7%
- RM3,000,00 above to RM5,000,000 = 0.6%
- RM5,000,000 and above = 0.5%
Real Property Gain Tax (RPGT) (Effective 1st January 2014)
For Locals and Permanent Residents
- 30% flat rate for all the gains received from property transaction and the property has been purchased and owned it for the last 3 years.
- 20% flat rate for all the gains received from property transaction and the disposal on the 4th year.
- 15% flat rate for all the gains received from property transaction and the disposal on the 5th year.
- No RPGT if property is sold after 5 years from date of purchase unless is company disposal then will be 5% flat rate on disposal gain.
- 30% flat rate for all the gains received from property transaction and the property has been purchased and owned it for the last 5 years.
- 5% flat rate for all the gains received from property transaction and disposal after the 5th year from date of purchase.
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