What Are The Cost Of Buying Land In Malaysia

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:

1. Purchase Price

• The agreed price for the land itself, based on negotiation and market rates.

• Freehold land is usually more expensive than leasehold.
  
  

2. Legal Fees

• 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
    
    

3. State Government/Registration Fees

• 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.
  
  

4. Loan/Financing Costs (if applicable)

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.
  
  

5. Miscellaneous Costs

• 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.
  
  

Example Calculation

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.