When buying land in Malaysia, there are several costs you need to consider beyond the purchase price. Here’s a clear breakdown of the main expenses involved:
The agreed price for the land itself, based on negotiation and market rates.
Freehold land is usually more expensive than leasehold.
Lawyer/Conveyancing Fees: Typically 1%–2% of the purchase price (for land purchase) for drafting Sale & Purchase Agreement (SPA), handling transfer of title, and registration.
Stamp Duty on SPA:
Stamp duty is calculated on a tiered scale:
1% on the first RM100,000
2% on RM100,001 – RM500,000
3% on RM500,001 – RM1,000,000
4% on amounts above RM1,000,000
Land Transfer Fees: Usually 0.5%–1% of the purchase price, depending on the state.
Memorandum of Transfer (MOT) or Deed of Assignment: Legal registration of ownership at the land office.
If you’re financing the purchase via a bank:
Loan processing fees: Around 0.5%–1% of the loan amount.
Valuation fees: Typically RM300–RM1,000, depending on land size and location.
Stamp duty on loan agreement: Usually 0.5% of the loan amount.
Survey/Plot Verification Fees: Optional but recommended, especially for larger or rural lands.
Agent Commission: If you buy through a real estate agent, typically 3% of the purchase price.
Development Charges / Quit Rent: Some states may charge cukai tanah (land tax) or quit rent annually.
For a RM500,000 land plot (freehold) in Selangor, rough costs could be:
Legal fees: RM5,000 – RM10,000
Stamp duty on SPA: RM12,000 (1% on first 100k = 1,000; 2% on next 400k = 8,000 → total 9,000? Wait let's calculate carefully)
Let’s calculate step by step:
1% of first RM100,000 = RM1,000
2% of RM100,001–RM500,000 = 2% of RM400,000 = RM8,000
Total stamp duty = 1,000 + 8,000 = RM9,000
Other costs: agent commission (3%) = RM15,000, loan processing ~RM2,500 if applicable.
Total additional costs could easily reach RM20,000–RM25,000 on top of the RM500,000 land price.