How much do I need to pay for my legal fee, stamp duty, valuation fee and other costs?

How much do I need to pay for my legal fee, stamp duty, valuation fee and other costs?

 

Entry Cost, also called Moving Cost is the cost bearable by borrower in the acquisition of a property, be it from developer, sub sale or inherited from another family member.

 

Basically, the 3 main fees required in an acquisition are as follows:

 
a) Legal fee (a.k.a professional fee)
 

Legal Fee is a scaled professional fee payable to your solicitor (lawyer) to secure their service in handling all your sale and purchase matters. Should you be getting a loan from bank or other financial institution, you are required to secure the solicitor (lawyer) service for loan documentation (also called agreement) between you and the bank/FI; and another similar fee will be levied for such service.

 

 

(Examples below are applicable for both Sale & Purchase Agreement and Loan Documentation)

 

Consideration or Adjudicated ValueScale of Fees
For the first RM500,0001.0% (subject to a minimum fee of RM300)
For the next RM500,0000.8%
For the next RM2,000,0000.7%
For the next RM2,000,0000.6%
For the next RM2,500,0000.5%
Where the consideration or adjudicated value is in excess of RM 7,500,000Negotiable on the excess
(but shall not exceed 0.4% of such excess)

 

For example:

If the property price is RM550,000, the calculation is:
First RM500,000 @ 1%RM5,000
Next RM50,000 @ 0.8%RM400
Total Legal FeeRM5,400

 

 

 

If the property price is RM10.5 million, the rate above RM7.5 million is negotiable between the law firm and the client. If say the negotiated rate is 0.2%, the calculation is:
For the first RM500,0001.0% (subject to a minimum fee of RM300)
For the next RM500,0000.8%
For the next RM2,000,0000.7%
For the next RM2,000,0000.6%
For the next RM2,500,0000.5%
Total Legal FeeRM45,450

 
b) Stamp duty

Ad valorem stamp duty is payable to the LHDN for all sale & purchase and loan agreement transactions. However, unlike legal fee above, the scaled fee tariff is different for sale & purchase and loan agreement.

 

Stamp Duty (Sale & Purchase) – also referred as MOT (Memorandum of Transfer) fee

 

Stamp DutyScale of Fees
First RM100,0001%
Next RM400,0002%
Thereafter3%

For example:

If the property price is RM550,000, the calculation is:
First RM100,000 @ 1%RM1,000
Next RM400,000 @ 2%RM8,000
Next RM  50,000 @ 3%RM1,500
Total Stamp DutyRM10,500

 

 

 

Stamp Duty (Loan Agreement)

 

Stamp DutyScale of Fees
Any amount0.5%

For example:

If the property price is RM550,000, the calculation is:
First RM550,000 @ 0.5%RM2,750
Total Stamp DutyRM2,750

 
c) Valuation Fee

Valuation exercise is applicable for refinancing, sub sale and in some special case, purchase from developer. Valuation fee is only applicable in loan agreement fee. A valuer (also called appraiser) is appointed as a middle person between the bank/FI and the borrower, to value the said property and a valuation report will be sent to the bank and a copy will be given to the borrower.

 

Fees payable for Valuation reports.

ValueScale of Fees
First RM100,0000.25%
Next RM2,000,0000.2%
Next RM7,000,0000.1667%
Next RM15,000,0000.125%
Thereafter*Multi Tiered not exceeding 0.1%

 

Minimum Fee : As above, subject to a minimum fee of RM 400 per property.

For example:

If the property value is RM550,000, the calculation is:
First RM100,000 @ 0.25%RM250
Next RM450,000 @ 0.2%RM900
Total Stamp DutyRM1,150

 

 

Other Costs

There are typically a few costs charged in an acquisition of property, and some such costs are levied in Sale & Purchase and Loan Agreement payable to the solicitor or valuer.
 
a) GST
GST is payable to the Malaysian government for the nation’s development. It is charged in most fees.
 
b) Search fee
RPGT (CKHT 2A) search

c) Bankrupcy search
 
d) Land Search

  1. c) Stamping fee
  2. d) Statutory Declaration fee
  3. e) Caveat fee

e) Entry of Caveat

f) Withdrawal of Caveat

  1. f) Transportation charge
  2. g) Stationary charge
  3. h) Printing charge
  4. i) Telephone charge
  5. j) other miscellaneous charge

All the fees should be in the region of less than 1% of the purchase price.

 

So how much should I pay?

If you are not financing any entry cost, and taking into account the S&P (MOT) fee, you should get ready 5% to 10% of your purchase price to cover all the costs mentioned above.

Do drop your inquiries in the comment sections below 🙂

Cheers

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